A 2015 survey concluded that around 76% of Indian adults are illiterate when it comes to basic financial concepts. While home loans are common in the country, very few consumers are truly aware of the correct procedure to avail such a form of credit.
Before you apply for a home loan, ensure that you are aware of the key steps in the process. Listed below are some pointers to help you with this pursuit.
Evaluation of your financial status
It is advisable to evaluate and review your current financial situation, which includes your liabilities, assets and savings before proceeding with a housing loan application. Doing so helps you determine how much you can spend on your monthly instalment without overburdening yourself. An online home loan calculator can also aid in this pursuit.
Spend time in doing research work
You can spend time doing the research work about the features, interest rates, tenor along with the terms and conditions before making an informed decision about availing a home loan. While comparing between various lenders about housing loan products, it is wiser to choose a financial aggregator who would provide a loan at a lower rate of interest.
Noting your CIBIL score
Your CIBIL score will make a reflection of your credit score. The ideal CIBIL score for a home loan should be 750 and above. A lower CIBIL score does not necessarily reflect your ineligibility, but higher credit rating will definitely help to meet home loan eligibility criteria.
Keep your documents prepared
Documentation is an essential aspect while applying for a housing loan. It is recommended to keep your documents ready before you start filing your housing loan application form. It will help approve your home loan quickly. Following documents should be kept ready while applying for a home loan:
- 3 passport sized photographs.
- Identity proof: Aadhaar Card/ Voter’s ID Card/ PAN Card/ Driving license/ Passport.
- Address proof: Aadhaar Card/ Voter’s ID Card.
- Financial account statement for the last 6 months.
- Salary slips.
- Signature identification.
- Income proof which may include income tax returns/ balance sheet along with all annexures/ last six months financial account statement.
- Business address proof may include PAN card/ Electricity bill/ SEBI registration certificate/ Passport/ Telephone bill/ Rent agreement on stamp paper (if any)/ Tax receipt.
Negotiation with the term and condition
You must understand all the terms and conditions. It is also recommended to negotiate with the lender to avail the home loan at the most beneficial terms to decrease your financial burden. It will allow you to make timely reimbursement.
Additional advantages and benefits
Before signing the agreement of your home loan, it is advisable to analyse the ability of a lender to provide you with benefits. These benefits include extra top-up, Flexi tenor, reaction to regulatory and rate changes from RBI, etc.
Availing a home loan is a significant and long-term financial commitment. It is essential to analyse various options before rushing into a quick decision of availing the loan. Spending time in research will help with your decision while signing the agreement of a housing loan. It will also help in choosing the right financial company, providing better features and facilities while availing a home loan.