A prospective borrower can opt for a housing loan and fulfil his/her dream of purchasing a home. Irrespective of the type of home loan and the chosen lender, the overall process of application is the same.
Nevertheless, individuals must check different lenders to avail lower interest rates and better servicing terms.
How to apply for a home loan in India?
To apply for a home loan in India, an applicant can opt for an online mode. Although the application steps may vary with lenders, general steps are as follows:
Steps to apply for a housing loan
Step 1: Visit the official website of your chosen lender.
Step 2: Fill up the online application form. Provide personal and financial details, such as the applicant’s name, employment status, income, property details, and others.
Step 3: Secondly, fill up the Property details in the housing loan application form.
Step 4: A relationship manager will contact you. He/she will then explain further details regarding loan sanction and disbursal process.
Step 5: Finally, upload all the required documents to further process the home loan application.
Apart from these necessary steps, knowing the types of housing loans will also simplify the application process. This will help a borrower to choose the correct type of housing loan as per his/her needs.
Types of Home loans in India
- Home loan
A housing loan is an ideal choice for those who want to buy a residential property. It provides substantial funds against fulfilling the set eligibility criteria and providing the necessary documents.
- Home construction loan
If an applicant opts for a loan to construct their home, this is an ideal choice for them. But it should be noted that this type of loan depends on the rough estimates on home construction. Loan amount disbursal might be in instalments or in one portion, depending on a lender and borrower’s application.
- Home renovation loan
Borrowers looking to avail a loan to renovate their existing home can opt for this type. Most lenders provide this type of home loan but it comes with a shorter repayment tenor.
- Land purchase loan
This type of loan is available to purchase land, irrespective of the intention. If an applicant doesn’t have enough funds to invest in land, it is an ideal option.
- Joint home loan
When a loan application has more than one applicant, it is termed a joint housing loan. One can avail this type of home loan with his/her spouse, sibling or parent. If the co-applicant is also the co-owner of the property, they can avail of certain tax benefits.
These tax benefits can be availed under sections 80C and 24(b). Maximum tax exemption under section 80C is Rs.1.5 lakh, whereas under section 24(b) is Rs.2 lakh.
Therefore, one must carefully assess his/her requirements and then apply for a suitable financing option.
But, it is important to check EMIs beforehand for smooth financial understanding and better repayment. Most borrowers prefer the online EMI calculator for its accurate and fast results. Apart from this, an EMI calculator also provides the amortisation schedule, along with details of the total EMI, and total interest payable.
An EMI calculator is a simple and easy tool to use. An applicant needs to enter their desired loan amount, tenor, and interest rate to get details concerning their interest. In this calculator, there are certain factors an applicant needs to be aware of:
An applicant can adjust the tenor as per his/her convenience to settle for an affordable EMI option. One must remember that the tenor is inversely proportional to the EMI amount. So, the longer the tenor, lower will be the EMI. But the overall interest outgo significantly increases here. So, applicants must carefully choose a tenor.
- Loan amount
Most borrowers pre-decide the loan amount before availing it. Here, the EMI amount is directly related to the loan amount.
- Rate of interest
This is offered by a lender while opting for a home loan. Much like the loan amount, it is also directly proportional to the EMI amount.
In India, several financial institutions provide pre-approved offers to expedite loan applications. These offers are available on several financial products like a housing loan, loan against property and others. An applicant needs to enter his/her details like name and contact number to check these pre-approved offers.
Hence, to settle for the best home loan option in India, an applicant needs to look for the perfect category that suits their requirement and thereby look for a lender offering the best-servicing terms.