Last Updated on 26/02/2022 by Deepak Singla
Home loans are something that you invest in when looking for a secured asset that belongs entirely to you and this implies a long-term expenditure. Home loan repayment tenures usually have a span of around 15 to 20 years or even longer. Hence, you must opt for a home loan option that offers the lowest possible rate of interest. This will ensure that the interest rate does not affect the EMI and you will be paying to your bank every month for the loan period.
If you are looking forward to acquiring a home loan from a bank or applying for a home loan online from the bank’s website, compare the interest rates provided. Banks do offer differential rates regarding policies, the deposited amount, down payment amount, inflation, etc.
Getting a home loan with lower rates of interest means that the Equated Monthly Installment to be paid every month gets quite lower as well and does not hamper your financial goals. A home loan is long in tenure and hence, planning out your finances in advance or ruling out approximations will ensure that your savings do not get drained out in the process of paying for the home loan every month. When you are planning to get a housing loan, several factors should be kept in mind.
Home Loan Interest Rate
Here is a list of the banks that are offering the best rate of interest at present:
- Axis Bank –90% – 8.55%
- Bajaj Finserv –90% – 11.15%
- Citibank –75% – 8.03%
- HDFC Bank –80% – 8%
- ICICI Bank –90% – 8.05%
- Kotak Mahindra Bank –75%
- Tata Capital –90% – 8.75%
- SBI (State Bank of India) –80% – 7.35%
These are the current market rates you will encounter when you apply for a home loan online or even if you inquire physically in the banks. In the list of banks mentioned above, you shall see that the lowest range is around 6% and the highest range can go up to 11%. Your CIBIL score comes to the question now. The higher your CIBIL score, the more you are likely to get a home loan from one of these banks at a lower interest rate.
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Tips to apply for Best Home Loan in India
Go through these few tips to make sure you bag an appropriate interest rate for your home loan.
1. Good Credit Score
Maintaining a healthy credit score is the first thing that a bank will notice when considering the best interest rate for you. A healthy credit score implies that you have good repayment ability and hence the interest rate on your loan amount will be significantly reduced.
2. Accountable Secondary Income Source
This is another factor you should consider when taking a home loan. If one source of income gets cancelled out, having a second one will allow you to waive off your loans without many hampers and this is something banks consider when allocating an interest rate appropriate for you. It is not possible, though, for one person to be working multiple jobs, for that matter, to present a secondary source of income. But your account manager can provide you with information on how you can showcase an accountable secondary source of income to get lower rates of interest on your loan amount.
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3. Applying With a Co-applicant
This is a simple and efficient way to get a home loan. When you apply with another person as the co-borrower, you sign yourself up for a range of benefits. You can avail of tax benefits on the interest amount as well as the principal amount. You can also get some tax relief if you plan to divide ownership of the property with your co-applicant. It is advisable to contact and inquire about these benefits with your account manager. The most common benefit of applying with a co-applicant is that your responsibility for loan repayment gets divided. One can act as a proxy for another, in case an unsolicited situation arrives. You really need to check the complete home loan processing process for easygoing.
4. A Property Without Disputes
This might show up later in getting a loan, but this is a necessary factor to get a home loan based on low interest. Banks offer to search and clear properties for you. Ensure that the property of your desire has no dispute waiting to be cleared. When a property has unresolved issues, your bank will try to clear out these issues for you, especially banks specialising in home loans. But in that case, they may charge a higher interest rate to balance their expenditure incurred during your property searching. You can choose to resolve property disputes of your own accord, but that will lead to unnecessary expenses on your part.
To conclude this list, go ahead and compare the best interest rates while you keep these essential factors in mind. This will ensure you get the best interest rate in the market for your desired home loan.