How to choose bank for home loan

I am planning to apply for home loan. Value 35L. I am eligible for the same. Based on interest rate, should opt for xxxx do I need to check any thing else.
Thanks

Hi,

There are many factors that you need to look at when you are going for a Home Loan. Here are some of them.

Loan eligibility

The amount you will receive as a loan depends on your monthly income. The loan amount will also be decided by the value of the property. A loan amount given out is generally up to 80%-90% of the property’s value.

Here’s some good news. The Reserve Bank of India, vide a notification in 2015 has allowed a Loan to Value ratio up to 90% for Home Loans amounting to Rs. 30 lakhs or lower.

Remember, a larger loan amount would mean a smaller down payment. Your loan EMIs would be higher, though.

The interest rate

The rate of interest on your Home Loan will make a difference to your EMIs and your total interest outflow. Look around carefully before choosing a lender. Get the lowest interest rate on the loan. You should also decide whether you want to take a loan with a fixed interest rate or a floating interest rate. Since interest rates are falling, a floating rate might be better. However, if interest rates start rising, you might need to shift to a fixed rate loan.

Processing charges and prepayment terms

Processing fee is a fee that banks charge for managing your loan application. The processing fee can range anywhere between 0.25% - 2% of the total loan amount. You should also find out about the loan prepayment terms from various loan providers before settling on one. Choose a lender that offers the lowest processing fee on your loan.

Loan rate revisions

You should also check how quick a lender is to implement changes in interest rates of Home Loans by the Reserve Bank of India. Get a better deal from those lenders who change rates as soon as policy revisions are announced. This is for floating rate loans.

The documents

Most lenders request the same documents to verify your identity, address, age, etc. in order to process your loan application. There may be some variation in their requirements.

Turnaround time

Different banks take varying durations of time to process and disburse a Home Loan. Most banks take an average of 5 days to approve a Home Loan, assuming that all the documents are in order. Select a lender that has a good reputation with respect to turnaround time and good customer service after the loan is disbursed.

Review all these factors to choose a loan that best suits you, rather than basing your choice only on one or two factors.

Want to check our Home Loan offers? Click here.

Cheers,
BB Expert

Banks check your credit score while assessing your home loan application. Interest - Check for the home loan interest rates. These interest rates vary from bank to bank . Look for the bank that provides their services with lowest interest rates