Are you thinking about getting a second home? While you might already have a beautiful home that you’re living in, maybe you’re looking for a vacation home to spend your holidays in. Or perhaps you just want an additional income source through rents.

Whatever the reason, purchasing a second home is a big deal! And although buying a second home is tremendously exciting, it comes with its own set of financial considerations. So, before you agree on an offer for a villa by the lake or a penthouse, consider asking yourself these questions.

How much will it cost me?

Although a weekend home can give you the perfect getaway for a peaceful mind, buying one without factoring in the costs may not give you one. Apart from the cost of the house, you need to look into aspects such as maintenance expenses, property taxes, and even indirect liabilities such as a mortgage. 

What’s the need for a new home?

Are you planning on purchasing a weekend villa to help you save money on accommodation expenses? Think again. Although it might help you cut short on hotel expenses for the short term, the overall expenses that you may end up spending can be higher. In this case, careful planning can help you see if you’re saving money or losing it. 

What location are you considering?

The location you are eyeing is important too. Check whether it is a risky or pleasant neighbourhood. An expensive weekend home in a safe neighbourhood is a much better trade-off than a cheap weekend villa at a riskier location. Other factors to consider may be the amenities available, proximity to the airport, or train station, etc. and other potential risks.

Can you really afford a second home?

The first step towards buying a second house is to think about your finances. Did you know that a second home can be just as expensive as your primary home? Can you pay cash for the second home? If not, you will have to factor in the cost of a home loan.

The best thing to do is sit down with a lender and a realtor in the area and discuss your options. You will also need to think about monthly expenses like maintenance, electricity bills, and other utilities.  The easiest way to do that is to look at your current monthly expenses. This will tell you if you can really afford a second home or if you need to wait for more time before you buy one.

How do you plan to use your second home?

Are you going to use the property as a second home for yourself? Or will you rent it out to cover all other associated costs? Answering these questions will help you understand where to look for properties and which type of properties to look for.

If you’re buying a second house for personal use, you can purchase whatever strikes your fancy. But if you are counting on rental income to pay the loan EMIs, you need to consider the property’s location. You can’t buy a secluded cabin in the mountains and expect potential renters to show up.

Are you rushing into making a decision?

As with any big purchase, you should ensure you’re not buying a second home based purely on impulse or emotion.

Consider everything, your finances, home loan interest rates, location, rent, and future expenses. You always have the flexibility of time, so whether you buy the second home this month or the next month doesn’t really make a difference.

In other words, spend a considerable amount of time researching and choosing the property that suits your needs and finances.

Will you need a loan?

If you don’t have lots of cash lying around, you may need to fund your property purchase using housing finance. For that, you may need to conduct additional research to zero-in on a suitable lender.

Don’t choose a lender simply based on the interest rates they offer. Consider other factors like home loan eligibility, tenures, and loan amount. Besides, if you already have a pending loan on your first home, you need to have enough cash flow and credit score to afford a second one. Planning your EMIs using a home loan EMI calculator is also an excellent first step.

In conclusion

Whether it be a weekend home far away from the city or close to the beach, these are all several important questions you need to ask yourself before buying a second home. With all of that in mind, is your answer to the last question – yes? Well, then, you’re in the right place! Avail of Tata Capital’s home loan today and enjoy competitive interest rates, quick disbursal, and flexible tenure. Visit our website today!

Loans can work as a blessing in our times of need. Loans such as a home loan can not only finance your home but also increase your purchasing power to buy a better one. However, loan repayment can turn out to be a stressful aspect if you don’t take care of finances effectively.

Daily expenses contribute to this greatly. While they might not seem significant individually, the month-end bills can add up to substantial expenses. Things get more pressing when you have additional responsibilities as well. Moreover, some people may take another loan while in the midst of repaying another one. Although there is nothing wrong with taking two loans, you must consider their affordability, your income, and expenditure to ensure you can repay them conveniently.

Are you repaying a home and personal loan simultaneously? Then, keep reading to learn about how to prioritise your home loan vs personal loan repayment commitments.

Factors determining the urgency of repayment

Often, when people have more than one loan, they continue to repay them equally by allocating a steady supply of their income towards EMIs. However, this can harm your savings in the long run. Also, with a home loan already on your shoulders, making a personal loan repayment can make things complicated. 

Here are some things to consider when deciding on your home loan vs personal loan EMI payments:

• Total EMI amount
• Is the interest rate higher than the personal loan rate?
• Loan tenure

In any case, you can always use a home loan EMI calculator to accurately determine the EMI burden of the two loans. And choose which one to repay first.

Which loan should you repay first?

Since both loans are important to repay, a simpler way of deciding would be to use tools like a personal loan repayment calculator. This will help you find out how much you are spending right now. By plugging in the numbers for interest rates, the loan amount, and the number of years, you’ll get a monthly EMI figure.

You can also decide which loan to repay first by considering the factors given below.

Interest rates

Because of higher interest rates, personal loan repayment can be prioritised over home loans. Furthermore, as home loans give you tax benefits on both the principal as well as the interest, it is wise to repay your personal loan first.

Tax benefits

As opposed to personal loans, a loan for a house purchase comes with tax benefits. You can claim up to Rs. 2 lakhs paid on the interest for the entire loan tenure. This can significantly reduce your tax burden and help you save money, making the loan repayment relatively affordable.

Cost of loan

Generally, people prefer to pay off the loan with a high value of borrowing. But it is more beneficial to repay the high-cost loan first. This means you should repay the loan with a higher interest and longer tenure first and get free from the burden. After that, you can easily manage to repay the loan with a more affordable home loan interest rate.

Prepayment facility

There’s also the option of prepaying a loan. You can choose to prepay a loan and close it earlier, but this comes at a cost. You need to pay the penalty on prepayment, so make the decision wisely. Some lenders do not provide a prepayment facility at all. Thus, you should clarify whether this facility is available or not beforehand.

Generally, lenders have specific rules about the time of repayment. For instance, lenders may let you prepay the loan after a year of paying the monthly installments. They can also decide how much you can pay. For instance, you may be allowed to pay 25% of the principal amount that is outstanding. So, with a personal loan repayment calculator, you’ll be able to calculate how much you need to pay and how much you can save after the prepayment too.

Experts generally advise prepaying the home loan first as it offers a large benefit. The benefit here is that a large chunk of your prepayment money will go towards the interest. Since the first few years generally have you paying the bulk of interest, prepaying a large amount will mean you will pay more toward the principal and less toward the interest in the future. In other words, you’ll be paying the loan much faster this way.

Wrapping up

And that’s it! You now have a complete picture of the repayment of two loans at once. If you want to finance your house purchase, leverage Tata Capital’s easy-to-fulfill home loan eligibility and obtain a loan of up to Rs. 5 crores. In addition, we provide a flexible tenure of up to 30 years, depending on your convenience, and some of the most competitive interest rates. For more information, visit our website today!

If you are planning to buy a house by taking a home loan, there are two options you can choose from. You can either take a loan from a bank or a Non-Banking Financial Company (NBFC).

The popularity of NBFCs has increased in the last few years, and customers are now more aware of the two options they have. However, choosing between a bank and NBFC can be a tricky task.

Because of their wider reach, most people usually rely on banks over NBFCs when taking a substantial loan for their house. But it would help to be aware of how the two institutions provide finance and the different criteria they follow.

The difference in interest rates

Banks are directly linked to the RBI and offer home loan interest rates based on the Marginal Cost of Lending Rate (MCLR). The MCLR-linked interest rate implies that whenever the MCLR changes, the interest rate will also change. It can either increase or decrease. However, banks follow complete transparency in this procedure and clearly mention the time intervals at which the interest rate can change.

NBFCs, on the other hand, don’t have complete transparency regarding their interest rates. Because they may be higher or lower than lenders, the lack of transparency means that there is a higher risk involved. Thus, to be on the safer side, experts suggest having more money for paying your EMIs or making a loan repayment to offset the risk.

However, a home loan from NBFC can be cheaper as they do not come under the purview of the RBI and offer their interest rates at the Prime Lending Rate (PLR). Thus, if you have a good credit score, you can negotiate with the lender to sanction the loan at a nominal interest rate.

Eligibility criteria: banks vs NBFCs

Your age, monthly income, credit score, desired property cost, and other credentials affect the application process. An important point to note is that banks typically have stricter regulations, while NBFCs have more lenient rules. This is also one of the reasons why the popularity of NBFCs is growing. These let consumers get a home loan in a shorter time span.

Processing time and home loan disbursement

Banks and NBFCs typically perform verifications and background checks to ensure the applicant will not default on the EMI payments. Applicants are often required to submit documents like income proof, bank statements, identity proof, etc. However, most NBFCs offer a fully digital application process, making it more convenient for borrowers to apply for a loan.

You can scan and upload all the documents from your home. This brings down the processing time, and the loans are disbursed quickly.

Security measures

As banks come under the RBI regulations, they have a security measure in place that guards up to Rs. 5 lakhs. However, the case is different with NBFCs. While they must follow certain regulations of the RBI, they are not bound by the regulator in the same manner as banks.

This means that there may be some security measures you may not be able to receive under NBFCs. Consumers availing of a home loan should consider this important point as well, should there be any unfortunate incident in the future.

Other costs to consider

Apart from the loan amount, some lenders do not charge registration and stamp duty costs. A home loan from NBFC can include these costs during the time of a home loan disbursement. These costs may be high for some and affordable for others, but depending on the amount, you can make it a point to have them included in your home loan disbursement itself.

Wrapping up

Are you looking for a suitable housing finance option and want to take a home loan from NBFC? Tata Capital can provide you with the most affordable loan options! And that’s not all! At Tata Capital, you can get some of the most competitive interest rates and repay your loan with a comfortable tenure of your choice. Visit our website to learn more.

Buying a home can be one of the most fulfilling experiences in life. Most people prefer to take home loans to finance their purchases and make the process easy. Besides, many lenders today rely on relaxed eligibility criteria to provide loans, which is why you can now obtain the necessary funds within days of applying.

In any case – you, as the borrower, can follow some simple steps to make sure your loan application gets approved instantly. Here are some tips to ensure a smooth borrowing process.

Strengthen your credit score

A credit score is one of the most important factors that lenders look into your online home loan approval process. This is because this score gives lenders your history and a means for them to ascertain your financial situation. They scrutinise this score carefully before approving your home loan application. Once you have a good credit score, you can take a home loan online; apply for one easily.

The credit or CIBIL score of the applicant, ranging on a scale of 300-900, is one of the most critical factors impacting your home loan eligibility. If you have a high CIBIL score, ideally of 700 or above, lenders may be willing to overlook some other shortcomings and grant you the loan simply based on your credit score.

This is because a high CIBIL score reflects your diligence in making loan repayments. So, lenders will be assured of your repayment ability. As such, having a CIBIL score closer to 900 is the best way to get a loan approved quickly.

Thus, to ensure that you have the best chances for your online home loan approval, you can check the following points to see how well you are doing:

• Check if you are paying your EMIs and credit card bills on time. A steady history of paying on time can increase that score slowly 

• Always ensure you avoid maxing out your credit cards. A ballpark figure of around 25-30% usage of your available credit is a good percentage to maintain or increase your credit score

• To make your online home loan approval smoother, ensure you pay off other loans on time

Clear off your pending debts

Before taking a loan for your house, make sure to clear any pending loans and credit card dues to improve your eligibility. Doing this will not only help you convince the lender of your creditworthiness but will also free up your finances and make room to accommodate the loan EMI payments.

However, if you feel that you cannot prepay an existing loan to close it earlier, don’t forget to use a home loan EMI calculator. Using the calculator will help you get the gist of your EMI obligations and tweak the loan amount according to your affordability.

Check how much you can afford

While this may seem obvious, knowing how much you can afford before you apply for a home loan online is a must. As lenders do not offer the complete amount you need for the property, you would need to pay the remaining amount as a down payment. 

If you have the means to make a bigger payment, you can avail of a lower loan amount. By doing this, you can take a home loan online; apply for one where you’ll have higher chances of getting a loan.

Get a co-applicant

One of the lesser-known ways to boost your credibility as a borrower and quicken your home loan approval is to get a co-applicant. A co-applicant is an immediate family member, such as a parent or a spouse, who earns a stable income and can support you in repaying the loan. Getting a co-applicant can increase your loan eligibility as the lender combines your income with your co-applicant’s income to offer better loan terms.

Know the basics of a loan

Finally, be fully aware of your chosen lender’s terms and conditions, including tenure, interest rates, prepayment facilities, processing time, etc. You must go through the application form thoroughly and understand the fine print to smoothen the process. This is important as customers may find themselves paying extra charges they weren’t aware of at the onset. Hence, to avoid such difficult situations, you must always be on top of the fundamentals of your loan.

Final thoughts

At last, gather all the relevant documents and disclose your credit information honestly. And if you’re looking for reliable housing finance, turn to one of India’s leading lending institutions – Tata Capital!

At Tata Capital, you can get your loan approved in a quick and hassle-free manner. We only require minimal documentation to disburse your desired loan amount in the least time possible. So, don’t delay and avail of the most competitive home loan interest rates today! Visit our website to know more.

Getting married is a huge milestone in one’s life. But it is only one of many! The next big milestone presents itself shortly after – buying your first house together. However exciting it may be, many people rush into the decision without giving it enough thought and struggle with their finances afterwards. If you don’t want to be one of them, here’s a home buying guide for you.

Do: when buying a new house

• If both you and your significant other are working individuals, it’s recommended that you apply for a joint home loan. A joint loan for purchasing a home will allow you to get a larger loan amount, and the burden of the loan will be shared by two people. What’s more, you both can avail of tax benefits if you opt for a joint loan.

• The stamp duty costs are significantly lower if the property purchased is jointly owned or solely under your wife’s name. Besides, in the unfortunate death of any partner, it becomes quite difficult to transfer ownership if it wasn’t jointly owned. That’s why co-owning property makes everything hassle-free.

• Research about the property and neighbourhood well before buying a new home. Pay close attention to the long-term suitability of the property in case you are planning to have children. Also, consider location, commute, and the stress and cost of expected renovations.

• While it may be uncomfortable to think about difficult situations, it ends up being necessary as buying a home together holds you to certain consequences. In case of an unfortunate event, such as the death of your partner, there may be legal issues that you have to deal with. This can range from creating a new loan agreement to taking a relook at your finances to ascertain affordability etc. Hence, make sure to take such probabilities into account before applying for a home loan.

• Consider home loan insurance, as it can greatly help you offset any unforeseen situations. Apart from protecting your investment, it also gives you tax benefits. Since home loan rates might eat into your savings, you can save more money by availing of a tax benefit. 

• Do think about the home and find out if it is the right fit for you. While buying your first house together is a significant milestone, evaluating the property from an unbiased view is as important. Doing this will ensure you don’t regret your choice later.

It is a good idea to keep an open mind when looking for new houses and thoroughly examine the homes before coming to a decision. At times like this, it is also best to think financially first to see if you can afford the home loan rates and then emotionally later to avoid making a bad decision.

• Do more research into the builder’s reputation as well. You wouldn’t want to buy a home from a builder that has a bad reputation even if you’re getting good home loan rates for that particular property.

• Above everything else, keep in mind that your relationship is more important than any home. Taking big financial steps can put a strain on any relationship. That’s why it’s essential to step into the process with an open mind. And work together to get the house that fulfils both your needs and wants.

Don’t: when buying a new house

• Don’t forget to get prequalified for a joint home loan. Getting prequalified shows real estate agents and potential sellers that you are serious and can get the necessary finance. It will also allow you to evaluate how much you can afford. Knowing this will help you narrow down your search and won’t let you waste time chasing properties that are outside your budget.

• Don’t rush into the decision. Buying a house in a hurry can leave many important things unconsidered. And picking the wrong property is a problem that isn’t easily solved. Take your time, and ensure you’re getting your dream house in a neighbourhood you want to live in.

• Don’t forget to pay off any ongoing loans. Getting rid of any outstanding loan won’t just make you a desirable client for a lender but also improve your credit score. Lenders take into account all kinds of debts, be it personal loans, car loans, or student loans. Ensure you clear all your pending loans before applying for a loan because the less debt you have, the better interest ratesyou will get.

In summary

Looking forward to living in your dream home with your significant other? With Tata Capital’s housing finance solutions, you can choose among the best houses for couples without compromising. Our loans come with attractive interest rates, faster processing time, and flexible tenures. Our loans come with attractive home loan interest rates, faster processing time, and flexible tenures.