Home Loan Phases - Before, During & After A Housing Loan - Home Loan Blog - Tata Capital

Before(s), During(s) & After(s) a Home Loan

Mar 10, 2017

This title might seem a little odd at first. What exactly is that we are trying to point out? But let us help you.

These are actually phases of any home loan.

So at first, it’s the BEFORE phase where you are about to apply for a home loan. Second is DURING phase where the application is being submitted and processed. Final phase is AFTER, where the loan is disbursed and you have to manage it.

Phase 1: BEFORE

  • You won’t get a loan if your credit score is poor. So ensure that you work towards improving it if it’s not good enough. Pay all loan EMIs and credit card bills on time. Also ensure you’re your credit card utilization is under 30% of your credit limits.
  • Different lenders offer different rates. So thoroughly research all available loan options. It’s possible that some new lenders might give you loans at much lower rates. Lower the rates lower the EMI and interest paid.

Phase 2: DURING

  • When you are applying for a home loan and have checked your credit score to be good enough, and then ask your lender to lower your rates. Lenders are more than willing to reduce rates in order to service a good and creditworthy customer.
  • Before signing on the dotted line, go through all the terms and conditions thoroughly. Make sure that you have read all the important terms and conditions.

Phase 3: AFTER

  • Do not miss any EMI payments. It will lower your credit score and you will have to pay later charges.
  • If possible, make prepayments to reduce the outstanding loan amount. This will lower the total interest paid and also reduce your loan tenure.
  • Periodic prepayments apart, also try to pay slightly higher EMIs than what is required. This too will reduce your loan tenure and total interest.