Buying a house typically means spending days looking for a suitable property, doing frequent background checks and trying to scout for the best deal on a Home Loan.
Since taking on a Home Loan is a long-term commitment, one needs to take the necessary precautions before applying for one. Here are some online tools that could help you find a good deal on your Home Loan and make the process stress-free.
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Check You Loan Eligibility
Once you zero in on your dream home, the next step is to identify the lender who will provide the loan. It can be an overwhelming task, especially with the number of banks and financial institutions operating in this market space.
To know your eligibility, you can use any online loan eligibility calculator. Your Home Loan eligibility is largely determined by factors such as age, qualifications, spouse’s income, assets, liabilities etc.
Generally, lenders provide you with a loan amount where the monthly instalment (EMI) ranges from 40- 50% of your monthly income, taking into consideration all your other ongoing EMIs. However, your loan eligibility can differ from lender to lender. For example, some lender may not offer you a loan tenure beyond retirement, while others may. Want to check your Home Loan eligibility? Click here.
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Here are few tips which can help you increase your eligibility to get your dream home:
- Go for a longer tenure: Your EMI depends on the tenure of your loan. So, if you increase the loan tenure, your Home Loan eligibility might increase as you will be committing to pay over a longer time frame.
- Prepay existing loans: It’s always a better idea to prepay all your existing loans before you apply for a Home Loan. That way your eligibility will increase accordingly.
- Opt for a joint home loan: Include your spouse or your parents as additional loan applicants. This way there will be more income to support the loan, which means higher chances of approval.
- Include other sources of income: Don’t forget to mention bonuses or perks you are eligible to receive from your employer or any other sources of income like rental income. It all adds up to secure a higher loan amount.
Additional Reading: How Your Home Loan Eligibility is Calculated
Once you get a fix on which lenders can loan you the desired amount, it’s important to compare what they have to offer as well. Apart from interest rates, it’s good to compare processing fees, administrative charges, and transaction costs etc. You can make use of loan aggregation websites to compare offers across banks.
Try and identify lenders who can waive certain charges. Also, assess the loan deal carefully before taking the final call.
Additional Reading: Top 5 Home Loan Charges
Know You Monthly EMIs
You’ve zeroed in on the home you want and you’ve checked your eligibility. But, are you still confused about your EMIs? Well, you can simply use a Home Loan EMI calculator to calculate your EMIs in no time.
The Home Loan EMI calculator gives you a clear picture of your monthly EMIs after entering details such as loan amount, tenure, interest rate and processing fee. It is a simple, fast and reliable tool to calculate your Home Loan EMIs and the best part is it’s free too!
Now, let’s explore the different components of the Home Loan EMI calculator.
When you apply for a Home Loan, the first thing that you need to figure out is your desired loan amount. Once you have zeroed in on a property and ascertained its price, calculate your down payment amount.
This will give you a better idea of the amount of loan you need to apply for. Make sure your calculations are accurate in order to get the correct EMI figures.
Home Loan Tenure
The next step is to choose the loan tenure you would like to opt for keeping in mind your routine expenses and other EMIs, if any.
Keep in mind that the longer the tenure of your loan, the higher will be the amount you’ll have to repay. You can always change the tenure of the loan on the calculator and arrive at a tenure that works best for you.
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Interest Rate and Processing Fee
Once you get an idea about the loan amount and tenure, simply enter the interest rate offered by your preferred bank or financial institution. Don’t forget to compare interest rates offered by different banks before you enter the amount.
Also, do keep in mind that the banks usually charge a processing fee of around 2% on Home Loans, which also needs to be taken into consideration when calculating your EMIs.
The Home Loan EMI calculator also gives you the option to prepay your loan amount. Prepayment is when you decide to pay a certain amount of your loan ahead of time. This helps in reducing your principal outstanding, which in turn reduces your EMIs.
Your monthly Home Loan EMI amount will be calculated depending on the amount you want to prepay.
Additional Reading: How To Plan Home Loan Prepayment
You can also view the amortisation details of your Home Loan. This will help you get a clear understanding of your principal Home Loan amount, interest paid and the outstanding loan amount details on a half-yearly or annual basis.
A Home Loan EMI calculator is an efficient tool, which helps you get a better understanding of your monthly instalments and other important details.
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Availing a Home Loan has become easier with online applications. However, if you fall short on any parameter, you may find it difficult to get yourself a loan. Make use of these online tools to avoid any hassle. Ready to apply for a Home Loan? Don’t forget to check out our amazing Home Loan offers!