Quick Tips to Avail the Lowest Home Loan Interest

Quick Tips to Avail the Lowest Home Loan Interest

How to get housing loan at lowest rate of interest?

If a home loan is to be described in simple words, it is a long-term credit system with substantially high rate of interest availed by aspiring home buyers to fulfill their dreams of owning a property for themselves!

Such home loan being of very long term, even a meagre change in dribs and drabs in the interest rate would yield significant change as we consider the loan tenure. This article is a cover up of simple tips that you may follow to zero in on the lowest rate of interest from banks in India.

Understanding the change in loan scenario

Before you get to know the best rate of interest, do you know that since 1st of October 2019, as proposed by the RBI, the loan interest rates offered by banks and small financing service providers are to follow the benchmark rates. This lead to most of these financers to follow the RBI’s repo rate. To note, until the 1st of October last year, the loan rates remained of floating rate kind.

Inspect the rates

As you understand that the home loan is based on RRLR, it does not necessary mean to offer the best rates. As a potential home buyer, you need to run the extra mile to compare the rates offered by various banks and the spread which means the bankers’ profit in addition to the repo rate.

Got women who are eligible to apply the loan?

Comparing men and women money lenders, banks always choose the latter to give their best offers and deals to encourage and motivate women in all ways possible. It is also quite easier for women to go through the course of processes of getting a home loan and the repayment tenure can be longer as well. Apart from the home loans linked to REPO rates, the pioneering effort to provide concession in loan was announced by SBI. So, in the long-run, you may have cheaper EMI when you go with the SBI.

Be choosy about the loan slab

While lending the loan, make sure to choose the right loan slab as the rate of interest will depend on the slab you choose. For better understanding, consider you avail loan amount under Rs 25 lakh: in this case the rate of interest will be a specific value whereas in case you are availing loan between Rs 25 lakh and Rs 45 lakh, the rate of interest will be different. With lesser the loan slab, lesser is the rate of interest.

Understand your borrower profile

The rate of interest depends on a lot of factors of which your credit score is the most important. Besides, it is also based on your expenses, and whether you are applying individually or with a co-applicant. Also, the bank would inspect if you already owe any other loan due, and there are many more factors in the same line that finally decides your eligible loan amount and rate of interest. While most of these are not under your control, you may directly rule over your credit score and make your borrower profile strong and eligible for the best interest rate.

In addition to discovering your eligibility or inspecting the bankers’ rules, there are a few measures which you can take to avail the best rate of interest towards your housing loan which are

Refinancing – even in case you have opted for a particular rate of interest, you may at any times migrate to another money lender who is ready to offer lower rate of interest.

Cut down your tenure – it is a smart move to reduce the loan tenure as it imposes significantly lower interest rate.

Join your partner – than to shoulder the loan on your own self, it is better that you split it into two and join your partner in sharing the repayment. In this way, you don’t just find it relaxing, but also get the best rate.

Making prepayment – this is the key to repay lesser rate of interest month on month. As you make prepayments, it reduces the overall interest amount you owe.

These are some of the tips to reduce the interest rate towards home loan. If you still have doubts, get help from the property developer or the housing consultant whom you are dealing with. Or you may get help from a financial consultant to know as to which loan system will be maximum beneficial.

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