If you have decided to finance your dream home with a loan, the first step will be finding a home loan scheme. 

At present, the interest rates on home loans are at an all-time low, and the application process is highly simplified. You will find numerous lenders offering you loans at the drop of a hat- but don’t rush! 

Getting a loan is a big decision, one that can affect your finances for years to come. To help you, here is a guide to finding the best home loan scheme in 2022. 

Compare interest rates 

The interest rate is the most critical factor that affects your repayment amount. Since interest rates vary among lenders, do your research and find the most affordable ones. 

Some schemes offer fixed interest rates. Your interest rate will remain constant even if the lender revises the rates, so your EMI amount will stay the same throughout the tenure. You can use a home loan EMI calculator to evaluate your EMIs in advance.

In contrast, some schemes have floating interest rates, which change according to the RBI’s decisions. Your EMI amounts can vary during your tenure and a floating loan is better when there are reliable indications that interest rates might decrease in the future. 

Additional Read – What is Housing For All By 2022 Mission in India

Check your eligibility

Once you’ve shortlisted lenders, go through their eligibility criteria. If you are a first-time homebuyer, you can benefit from government incentives like the PM house loan schemeor PMAY. So, check if you qualify for them before applying. 

Lenders may impose different criteria for salaried and self-employed individuals. Broadly, your eligibility depends on your age, income, employment stability, and, most importantly, your credit history. 

The importance of a good credit history

If you have a low credit score, lenders may reject your loan application or extend high-cost loans.

Conversely, a high credit score, preferably over 750, indicates that you are a responsible borrower, so lenders will readily approve your application and give you more competitive home loan interest rates. 

So, check your credit score online before approaching your preferred lender. Repay your existing debt, make timely repayments, and practice good credit discipline to boost your CIBIL score. 

Additional charges

Visit your lender’s website and understand all additional costs such as the processing fee, down payment charges, prepayment costs, and valuation fees applicable. Keep an eye out for any hidden loan charges. 

Terms and conditions

Every lender has its own set of terms and conditions regarding loan products. Read the fine print and note what it states about loan sanction, disbursal, and repayment. 

Additional Read – Different Housing Loan Options Available in India

Turnaround time 

Turnaround time is the time from the application of a loan till the final disbursal of the loan amount. Select a lender that has a short turnaround time. 

Final thoughts

A home loan is a long-term financial responsibility. So, researching is a must. Don’t hesitate to contact your lender to learn about their services. 

If you are looking for a credible housing loan financier, Tata Capital is here to help. Visit our website to check your home loan eligibility and learn more about our competitive interest rates and flexible repayment options. 

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