Nowadays there is a myriad of options for home loans available. The real task is to choose the most suitable loan for you. For a person who has little experience with loans and the benefits that come with it, finding the best option can be challenging. If you are wondering how to compare various home loans and find the best fit then look no further. Here are a few things to look for while comparing different lenders and the loans provided by them.
Eligibility is one of the first criteria that a lender looks at while approving your application. Various lenders prefer giving loans to customers based on parameters like job profile, monthly income, age, credit score, etc. While comparing home loans, knowing the eligibility ensures that your application is approved without any hassle and you can avail loan while keeping your credibility intact.
Loan to property value ratio
Another aspect to look for is the loan to property value ratio. As the name suggests, it is the loan amount that you can obtain given the market value of your property. Generally, this ratio varies between 40% and 90%. During the comparison, the lender that offers the most appropriate ratio should be given top priority.
Loan tenures can be long or short according to your monetary objectives. The former will increase the cost of the loan. However, this will also result in a lowering of the EMI cost. The latter does not affect the loan cost but will result in the increment of the EMI cost. Depending on your long term financial plans, you should go for the tenure that suits you.
Different lenders offer different interest rates on their loans. Comparing the home loan interest rates will give you a clearer perspective regarding the right loan product. Lenders offering competitive interest rates should be preferred as this will give you leverage over deciding which loan tenure you should opt for.
Cost of EMI
Equated Monthly Instalment (EMI) helps you to plan the monthly expenditure of your income. During the comparison, make sure to look for low-cost EMIs as this will lower the financial burden and help you in distributing your monthly income more efficiently. Due to the increased competition, many lenders offer incredibly low EMIs. Just so you have the right figures, you are advised to use a home loan EMI calculator which you can easily find online.
It is a one-time charge paid to the lender to cover the costs incurred during the loan process. This fee varies depending on the lender. Many lenders also offer a nil processing fees on home loans. It is crucial to add processing fees as one of the factors while comparing home loans.
Another factor to consider during the comparison is the offers that are available during the festive season. From no-cost EMIs to 0% interest rates, you can avail a plethora of offers provided by the lender. You just have to be very attentive to fetch offers like these.