Buying a home today is not very difficult. With banks doing their best to get customers to avail of loans from them, it is easy to get cheap loans today. Just keep a few things in mind before applying for a loan and get home loans at low interest rates.
How to Get Lower Home Loan Interest Rates?
You can get home loans at lower rates of interest if you keep the following in mind:
Loan Amount - Pay at least 20% of the loan value as a down payment. Making a substantial down payment reduces the loan amount required, thus helping individuals to enjoy a lower home loan interest rate.
CIBIL Score - Banks consider individuals possessing a CIBIL Score of 750+ and having a disciplined repayment history, creditworthy. These home loan applicants are likely to enjoy lower home loan interest rates. However, a low CIBIL score shows poor repayment capacity and may result in higher interest rates.
Tenor - Loan repayment tenor plays an important role in deciding interest rates. Loans with a longer tenor are usually associated with delayed payments and default and thus, come with high-interest rates. A short loan tenor helps borrowers enjoy lower interest rates and reduces the EMI.
Income Stability – The job stability of the borrower is a crucial factor when deciding on home loan interest rates. Since such loans are a long-term financial commitment, borrowers must have a stable source of income to make timely repayments. Thus, salaried individuals are likely to enjoy lower interest rates than self-employed people
Property Type and Location - The location and property type against which the loan is taken affects the loan interest rates. New properties in highly accessible locations with modern amenities are likely to have a high resale value. In case of default, they can be sold for a good amount, and thus loans against such property attract lower home loan interest rates.
Read Also: Major Factors that Affect your Home Loan Interest Rates
Final Words
Keeping the above factors in mind is important before choosing the most suitable home loan interest rate, or it may lead to financial problems in the future. Do your homework and use the online home loan calculator tool to know which lender is offering lower home loan interest rates.
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