Everyone wants to buy their own dream home, and while some may be able to do so with their own savings, others can approach a lender such as a bank or an NBFC to obtain the funds that they require. A Home Loan is a secured loan in which the borrower can use the property as collateral with the lender to secure the funds they require to purchase or build their dream home. Home Loan interest rates are the lowest interest rate when compared to other types of secured or unsecured loans because the loan amount is secured against the property that you are purchasing, and thus lenders are less hesitant to approve Home Loans because their risk factors are much lower.
According to the Reserve Bank of India (RBI) mandate, all lenders must link their Home Loans to an external benchmark such as the repo rate or the MCLR, allowing borrowers to benefit from lower interest rates on Home Loans.
Because your floating interest rate is linked to an external benchmark such as the Repo Rate or MCLR, borrowers can save a significant amount of money on interest payments if they choose a Home Loan with a floating interest rate. Under this regime, your interest rate fluctuates in response to market fluctuations, and if the external benchmark is reduced, so will your interest rate, and vice versa.
However, before applying for a Home Loan, you should be aware of the numerous other online tools available, such as a Home Loan calculator and a Home Loan eligibility calculator, to better determine your Home Loan affordability. Along with these tools, other factors to consider include tax benefits on Home Loans, as well as other fees and charges associated with a Home Loan.
The process of obtaining a Home Loan is relatively simple and straightforward, and there are now options for applying for a Home Loan online from the comfort of your own home.
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