Friday, April 19

Essential Elements of Home Loans and Significance of Balance Transfers

If you want to invest long-term or buy the property of your dreams, taking a home loan is the best option today. The best feature of house loans is that the Government of India encourages citizens to purchase a house of their own, encouraging reasonable interest rates on home loans. Getting a home loan is extremely easy now, as it can be applied online or even through a smartphone app.

Essentials of Home Loans

Given below are necessary elements of home loans that you need to check out before applying for one.

Meeting the Eligibility Criteria of a Home Loan

One of the key elements of applying for a home loan is to meet the eligibility criteria and then proceed with the application. Different providers have different home loan requirements based on age, income, earnings, and credit rating. You can use a home loan eligibility calculator to assess the same with an encumbrance certificate,

Accumulating the Documents Required for a Home Loan

For a Home loan, you must submit the following documents:

ID, Address, and Age proof

An Application ID

Proof of employment, business, income, bank details, and financial details of the business of the past three years

Form 16 and Income Tax documents

Educational qualification documents

All property-related documents with sanction map

Using the Home Loan EMI Calculator

Home Loan EMI calculator is a powerful digital tool available 24/7 for free. It can help you eliminate manual calculations and produce quick and accurate results like estimated monthly EMI on a home loan.

EMI calculator generally works after you punch in the interest rate offered by different providers, loan amount, and loan tenure. You can compare different financial institutions by using several combinations and arriving at the most affordable EMI amount. You can also reduce your interest payable amount by decreasing the loan amount or decreasing the loan tenure. However, if you want a lower EMI, go for a high loan tenure, higher down payment, and low-interest rate.

Comparing Different Home Loan Providers

One key characteristic is comparing different house loan providers before applying for one. You must settle for the one that offers the lowest rate of interest and maximum benefits. Financial institutions could offer home loans with discounted processing fees, 5-star consumer support, low foreclosure charges, easy application and documentation process, and other monetary or non-monetary advantages.

Tax benefits

Home loans come with tax benefits on the principal loan amount u/s 80C and the interest amount u/s 24B of the Income Tax Act, 1961. There are a few other tax exemptions granted for home loan owners; thus, you save a lot of money when purchasing a home of your choice through a home loan!

The Power of Balance Transfer Home Loans: A Brief

Balance transfer home loan refers to the process of transferring the existing home loan amount and balance to a new financial institution pradhan mantri awas yojana benefits,  which can be done for multiple reasons.

Given below are a few instances when transferring a home loan from one lender to another makes sense.

If the existing house loan provider is charging you a higher interest rate, and another lender is offering a lower interest rate, the wise thing to do here would be to transfer the loan to another lender.

If there has been a recent change in your credit rating, or if you indulge in debt clearance and proper payment of EMIs/other loan outstanding amounts, you are eligible for a lower interest rate. This can be gauged through balance transfers.

Balance transfers are also done for a lower EMI amount (monthly expense).

Sometimes, borrowers transfer their home loans from one lender to the other to get the customer support they lacked before. If such is the case, transferring the loan to another lender that guarantees 24/7 effective customer service would be the best choice.

Thus, home loan balance transfers help you save money on interest, get the best consumer support, debt consolidation, and improvement in credit score.

Conclusion

Make sure you are vigilant, do formal research, and settle for a financial institution that offers the best balance transfer conditions, interest rates, and consumer support.

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