Cheapest home loan in India

Things to know before taking a home loan: Cheapest home loan in India

Cheapest home loan in India

Money Tez we help in providing the best and the cheapest home loan in India.

Things to remember before taking a home loan:

Here are a few steps to follow before taking a home loan.

1.     Don’t just focus on Interest rate, look for “spread”

Most of the banks and HFCs offers an attractive interest rate that is temporary for new customers and this interest rate is changed based to proper rate that is based on “Spread” i.e., by + or – rate. Try to find some best tips and answers from any sources or get some tips from experts like Money Tez providers of “cheapest home loan in India” to know if you are getting best spread.  

2.     Buy a product only after getting a clear idea about it

Many banks and other financial institutions provide a complicated home loan that is provided in sales staff with their attractive terms. In our experience itself, we have been able to see lots of people contacting us after taking such loans from the bank and other financial institutions to know how it clearly works. Most of the people try to figure out why the bank is charging some amount from them while not charging the same from others.

3.     Check the EMI

Review the EMI for the loan. EMI should not be greater than 35-40% of your average income. If your EMI is more than 35-40%, it will really affect your lifestyle expenses. Being a bachelor, you may be asked to invest higher percent of your income towards EMI. Having a family with 1 or 2 kids and other expenses, you may feel difficult to meet all expenses with such EMI.

4.     Maintain good credit score

Banks and other financial institutions provide you the loans mostly based on your creditworthiness. If you are a person with CIBIL score of 750 and above, the chance of getting good home loans increases. As well as, in any case of certain problems occurs with the project, you are the only person to blame for it i.e. if your builder didn’t do his work within the time period, you cannot blame the builder and say you won’t pay.

5.     Take lesser tenure loan if you are comfortable with higher EMI

In case if you are able to pay higher EMI then try to settle for lesser tenure.

6.     Additional products with loans

Now a day’s most of the Banks and other financial institutions try to provide additional products or services with the loan .i.e. basically term insurance plan. Many banks try to be adamant about selling these products with loans that they may even try to threaten the customer by not sanctioning the loans. Do a recheck while going to buy such a product and try a negotiation on such products. As well as, in case some salespersons are giving higher pressure on you for taking this product then try to threaten the salesperson by complaining to Bank’s management, RBI, and IRDA. This does not mean that the term insurance is bad but you should be satisfied with the insurance product being sold by the bank.  

Cheapest home loan in India

The above are most of the factors that you have to consider while taking a home loan furthermore let’s discuss is it good to take this term insurance with home loan below.

Is it good to take insurance on loan?

On the above, we have already discussed home loan providers insisting on the receiver to take term insurance as a sub-product with the loan. As a receiver, it’s your choice to opt for it or not. So, is it necessary to take insurance?

As a bank or any other financial institution, their primary motive is on profit. As such, when the bank provides loan for the purchase of asset as a lender they are also concerned about the safety of the asset they have provided fund. It is because of the main reason that such assets stand as the primary security. In any case that this asset is lost due to some reasons or the other then there may be some issues in recovering the loan. Not only the lender but also the receiver will be facing some critical problems due to loss of the asset.  

Example:

Insurance for home loan

·         In case if not insured

While you take housing loans and the same property may have been lost due to some disasters or accidents such as fire, flood, earthquake etc. The lender i.e. bank or the other financial institutions will lose its security for the loan. As well as if in case the borrower does not cooperate with the bank, then the recovery of the loan becomes difficult. Secondly, the borrower will be out of money due to loss of his valuable asset and though he is legally liable to pay to the bank.   

·         If insured

If in case your property is insured then the loss will be recovered by insurance companies. The borrower may be having the option to get an alternate accommodation out of the insurance coverage. Thus, it is a good option that benefits both the borrower and the bank.

Insurance for business loan

·         In case if not insured

If the business is not secured with insurance and then the business may face a huge loss due to fire, flood, earthquake, theft, etc.     

·         In case if insured

 In case if insured the business may have the opportunity to recover soon as the insurance company may compensate all the loss and just business can quickly set back.

Insurance for vehicle loan

·         In case if not insured

Without vehicle insurance the person at the time of loss of/damage to car, loss of life, third party damages etc may have a huge expense.

·         In case if insured

If in case of vehicle being insured, loss of/damage to car, loss of life, third party damages are covered by the insurance company.

So, it is wise to decision of taking an insurance against your property. However the banks are not allowed to force you in taking the insurance while taking a loan.

Cheapest home loan in India

Money Tez we help in providing the best and the cheapest home loan in India, for more of queries and best home loans come visit us.

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