Property is a thing in itself and from the earlier times, till recent times will remain as the most important asset ever taken by any person and possession of it is important for ones living in society. However, Urbanisation make the prices of properties skyrocketing due to which borrower have to take the loan as the finances available with current job did not suffice to make a purchase. These days, a different bank offers different types of loans and facilities to match up borrower’s requirements. Home loan is one such type. Home Loan is a financial burden and before taking home loan borrower need to have the information of his annual income, including any overtime and commission, details of debts and expenses, such as other loans and debit cards and then has to think wisely to decide the amount as well as the bank from where one make up mind to apply for the same. Due to demonetization and reduction in lending rates offered by banks, interest rate competitions among banks hots up due to which employees working in banks resort to various tricks to woo and befool the customer by not disclosing of the long terms expenses and charges hurting their emotions impacting their finances in a big way which they can’t afford in the future during the closure of their loan Hence, Below mentioned are the important points to be considered for finalising the bank for taking loan:
- Evaluate Home loan Offerings Of Different Banks Pertaining To Sanctioning Of Maximum Loan Amount With Required Eligibility: The amount of loan that bank is likely to offer depends on your monthly income and value of your property. The loan amount would be 80-85% of your property value. It may be 90% in some cases where the amount of loan is more than 30 lakhs or less. Borrower will get home loan depends on his occupation -salaried, business, disposable income and number of dependents For a bigger loan one has to smaller down payment with a larger EMI.
- Compare The Rate Of Interest Of Different Banks: Rate of interest is very important as it influence the monthly EMI and total interest paid by your Home buyers should always shop around different banks and choose the competitive one offering best-suited bank providing facility of fixed and floated. Those taking loans for short duration from 2-5 years they should always advisable to take fixed loan whereas those with longer duration must take floating rates which vary according to market conditions. Hence, home buyers should compare the rate of interest and facilities which are availed by them from taking loan from a particular bank. For example, State bank of India is the first bank to announce the reduction in lending rates for home loans by 50 basis points to 8.60 % to women borrowers and 8.7 percent for other borrower on loans up to Rs 75 lakh. Other banks like HDFC, ICICI bank, India bulls follows. Among the government banks, Bank of Baroda is the first to offer the reduced interest rate of about 8.35 % without any balance transfer charges.
- Avoid Falling For Marketing Grimmicks Of Various Dsa S And Agents Of The Various Offers: Increased competition among various banks regarding disbursement of loans and pressure of achieving huge monthly targets banks employees usually resort to certain tricks and often the offers comes with a catch. For example, Bank of Baroda is offering 8.35% interest rate for only those customers with a credit score of 760 or more. Customers with a lower credit score will have to pay a higher rate of interest.
- Properly Read The Details Of Long Terms, Conditions, Expanses Involved For Processing Charges And Prepayment: Home buyers should ask for the complete process being followed by the bank, documents required. Bank charge 0.25%-2% of the loan amount as prepayment charges which the customer should be aware of Banks set terms and conditions pertaining to the prepayment that also the borrower need to ask for from bank from which borrower finally take the loan.
- Do Not Apply For Home loan In Different Banks: Always wisely choose a particular bank where you finally give all your necessary documents for taking loan as applying in different banks will affect your CIBIL score and your chances of loan being rejected for multiple applications will be higher. So, borrower should check rates/emi/ processing fee and disbursal time in 3-4 banks but apply and give documents to one only.
- Scope For Balance Transfer Offered By Bank: Home buyers must clarify the terms and conditions for balance transfer of the loan amount, settlement/ foreclosing the outstanding amount, transferring the balance to another bank‘s account, preparing a part and full as per the requisite of the homebuyer.
- Responsiveness To Change In Rates: Do check whether the bank from whom you decide to take the loan changes its interest rates following the policy changes by the Reserve Bank of India. Always go for that bank which usually seen reducing rates in response to cut in repo rate by the RBI because of the fair deal expected not only now but in future too.
- Turn Around Time Of The Bank: Do check with bank how many day will it take to sanction and disburse home loans as it may vary from bank to bank. Normally bank will take five working days to disburse the loan provided all the documents are in order. There are number of post disbursement services involved which include regular account statements and interest certificates on time every year. Choose that bank with strong systems and good record of after-sale service.
Conclusion: We can conclude by saying process of taking loans become easier and beneficial for the borrower in the long term if above-mentioned parameters are considered properly while selecting best-suited bank among others from where the loan is likely to be taken. Home buyer can hurry up to select the particular bank to avail the loan and seal the deal as soon as possible as per the terms and conditions as decided in written as earlier decided during the process of taking loan. This enables to have a cordial relationship of customer-bank relationship and will boost the economy of the country.