First of all, congratulations to you on your upcoming purchase of a new house. Purchasing a home is still a dream of every individual, especially middle-class people like you and me.
As an author of a financial blog, I would always suggest you go through the terms explained below :
I. Interest Rate:
Interest is one of the essential elements to consider while choosing the Best Bank For Home Loan in India 2020. Even a slight difference of 0.5% may affect your overall budget.
Interest rates are generally of two types – Fixed and Floating.
II. Processing Fees:
Processing Fees may be fixed or the percentage value of loan amount depending on the bank.
If your loan is accepted, you will be charged a processing fee deducted from the total. If you paid Rs. 2,500 as a login fee and the processing cost is Rs. 12,500, you will only have to pay Rs.
III. Pre-closure Charges:
This is charged when one tries to close his home loan account before the scheduled tenure. Pre-close costs are fees charged at the time of a loan’s closure, i.e., when the loan is entirely paid off, including the principal borrowed and the interest.
The banks collect this fee to recoup part of the interest they would lose if the client repays the loan before the end of the term, as interest revenue is the primary source of income for banks.
IV. Legal Fees:
For the examination of legal papers, such as a sale or purchase agreement. For this, banks and NBFCs levy a legal fee. Some banks charge legal fees for verifying the documents.
V. Part Payment Rules:
The Reserve Bank of India (RBI) regularly changes its policies on the “Levy of foreclosure charges/pre-payment penalty on Floating Rate Loans.” It defines the circumstances under which banks and housing finance companies (HFCs) can levy pre-payment penalties.
Part-payment means paying off extra money when you have a surplus. This money is then adjusted with your home loan account. Always consult with a water leakage solution specialist before buying a home to avoid significant damages in the home you will buy.
VI. Home loan Tenure:
Home loan tenure implies the duration for which you want to take a loan. Generally, it ranges from 5 years to 30 years.
The maximum tenure of a Home Loan depends upon the retirement age of the applicant. Banks authorize Home Loans which can be repaid within 30 years, but before the applicant quits from their service.
VII. Equated Monthly Installments ( EMI ):
EMI is the monthly installment amount that you have to pay in return for a home loan.
An equated monthly installment (EMI) is a fixed monthly payment paid by a borrower to a lender on a particular day each month. Equated monthly installments are applied to both interest and principal each month, and the loan is paid off in total over a certain number of years.
VIII. Down Payment:
Down payment is the lump-sum amount that you pay from your pocket during the purchase.
Bank allows a maximum of 80% of the home value as a loan, and the rest are born by the buyer.
This initial amount of payment by the buyer is termed a home loan.
Some of the top-rated Banks with competitive Interest rates are:
- SBI Home Loan
- ICICI Bank Home Loan
- Axis Bank Home Loan
- Hdfc Bank Home Loan
- LIC Housing Finance Home Loan
1) SBI Home Loan:
During the lending procedure, SBI employs one of the most severe property verification methods. The advantage is that you can be confident that the property papers are genuine, and you are unlikely to have any legal issues in the future.
The bank provides home purchase, construction, and remodeling loans, as well as top-up home loans.
SBI exclusively provides floating-rate and SBI Maxgain loans (home loans as an overdraft loan).
The interest is computed on a decreasing daily balance, which means that at the end of each day, the principal is recalculated, and the interest is calculated appropriately. If you make a partial payment today, your loan’s interest expense will be reduced starting the next day.
2) ICICI Bank Home Loan:
ICICI is recognized for its easy-to-understand documentation, quick approvals, and low interest rates. Purchase, building, and remodeling loans, as well as top-up home loans, are all available.
ICICI Bank provides home loans for properties worth up to Rs.5 crores with a credit term of 30 years.
Interest is computed on a decreasing monthly balance, which means the principal is determined at the end of each month, and interest is calculated accordingly. If you make a partial payment today, the interest on your loan will be reduced beginning on the 1st of the following month.
3) Axis Bank Home Loan:
Axis Bank offers house loans starting at Rs. Three lakhs. The loan can be used to buy a pre-built home, build a property, or take out a second mortgage.
Axis Bank offers both variable and fixed-rate home loans with terms up to 30 years.
4) Hdfc Bank Home Loan:
HDFC is recognized for its thorough examination of real estate paperwork.
You may have an HDFC loan specialist come to your home for a consultation, or you can apply online and upload your papers.
HDFC home loans provide low-interest rates and can be used to buy a house, plot a land, build a house, improve your home, or extend your property.
5) LIC Housing Finance Home Loan:
LIC Housing Finance offers homes, buildings, repairs, land purchases, home additions, and renovations.
Under some circumstances, top-up loans are also possible. The fixed and variable rate loan with a duration of up to 30 years is an option. The interest is computed every month with a decreasing rate of interest.
I have shared this information from the experience that I gained writing a financial blog. I hope your doubt has been cleared.
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