With the repo rate cut at 4% early this year, interest rates against home loans witnessed a significant reduction, making it affordable for prospective borrowers. Besides, reputed financers such as Bajaj Housing Finance Limited offer market best interest rates for salaried and self-employed individuals.
Availing a home loan from Bajaj Housing Finance will provide borrowers with an advantage of high loan quantum, nominal documentation and easy approval.
How to avail a home loan at a low-interest rate?
Usually, home loans are a long-term financial liability as it comprises a tenor of at least 20 years. Due to this, one needs to repay a substantial interest amount. For instance, if a borrower avails a loan of Rs.40 lakh at an 8.5% interest rate, he/she is liable to pay a hefty interest amount of approximately Rs.31 lakh.
This is why it is essential to choose a lender offering a loan at reasonable interest rates and flexible loan terms. Although the home loan interest rate depends on several factors, two of the fundamental aspects are the eligibility and credibility of a borrower. With a healthy credit profile, one can grab affordable interest rates and flexible lending terms.
Therefore, if you are planning to apply for a home loan or already servicing one, consider these suggestions to reduce payable interest against your credit.
- Choose shorter tenor
One of the essential factors to consider when opting for a housing credit is selecting the repayment tenor carefully. If individuals want to restrict their monthly instalments, they can go for an extended tenor, but in that case, the payable interest will be higher. On the other hand, opting for a shorter tenor will reduce the overall interest component but significantly increase EMIs.
Customers can check how the interest component radically reduces when choosing a shorter tenor by using a home loan EMI calculator. In this online tool, borrowers need to input the loan amount, tenor and interest rate and tweak these determinants until they reach their desired results. Therefore, applicants must select the tenor carefully to avoid paying a substantial interest amount against their loan.
- Consider prepayment
One of the effective ways to save substantial money and reduce interest rates is by making prepayments at suitable times. It helps borrowers pay off the loan early. If a borrower frequently makes prepayments, it will significantly reduce the outstanding principal, consequently reducing the payable interest. However, one must note that some lenders do impose prepayment and foreclosure charges. But availing a home loan from Bajaj Housing Finance Limited will ensure zero prepayment or foreclosure charges during the procedure.
- Compare interest rates online
Before choosing any financial product, it is essential to research and compare interest rates offered by different lenders in the market. Various websites provide clear information regarding rates and charges imposed by lenders. Therefore, it is wise to compare these rates online before settling for a particular product.
- Pay substantial down payment
Usually, most financial institutions offer 75%-90% of loan amount depending on the property market value and also by checking the home loan eligibility criteria met by the borrowers. Therefore, instead of paying the least amount as a down payment, it is better to contribute more. This is because the higher one pays, the lower he/she needs to borrow, thereby reducing the interest component.
- Search for better loan terms
Lenders offer a better deal to borrowers with a healthy score and credit report. So, if an individual’s CIBIL score for a home loan is above 750, he/she is likely to avail better interest rates against his/her loan. Besides, making repayments on time will also allow borrowers to grab competitive interest rates.
Apart from these, borrowers must know that they can substantially save on interest amount from home loan tax benefit based on the fund usage and under the Income Tax Act.
Hence, apart from knowing how to apply for home loan, one must consider these tips or advice to obtain an affordable home loan and reduce financial burden in the coming years. Eligible borrowers must note that they can also enjoy pre-approved offers on various secured and unsecured financial products, which significantly accelerate the loaning procedure and save time. To check your pre-approved offer online, mention your name and contact details.
Thus, by considering these factors, potential applicants can conveniently borrow a home loan from Bajaj Housing Finance Limited at a reduced interest rate and fulfil their requirements without any hassle.