Home loans are a convenient means to buy your dream house without digging into your savings. However, while availing a housing loan, you must consider your affordability and get an EMI that you can comfortably pay. Home loan interest rates have a significant impact on your EMIs. Therefore, while looking for lenders, you must look for the one who offers you the best interest rates.
Go through the following tips to help you get the best home loan interest rates.
- Do adequate research
Never take a home loan with the first lender you come across. Various lenders out there offer great deals and competitive interest rates. You must research thoroughly before you apply for a home loan. Look for a lender that offers the lowest interest rates with other facilities like an online interface, top-up facility, etc. You must compare different lenders based on their interest rates and then make a decision. A home loan EMI calculator can help you choose the best plan for you.
- Maintain a healthy credit score
A healthy credit score is possibly one of the most important requirements of a housing loan. Having a high credit score can enhance your chances of getting the best interest rates on a home loan. The higher your credit score, the better is your creditworthiness and repayment capability. Ideally, a credit score of 700 and above is considered healthy.
- Switch your loan whenever possible
If you are struggling to pay a high interest amount, probably, it is time to switch your home loan. With the transfer balance facility, you can transfer your home loan from one lender to another for lower interest rates or better deals. Transferring your loan can help you save on your interest outgo. However, you must do a cost-benefit analysis to ensure that it would be profitable for you and help you save money.
- Choose your loan type carefully
Your choice between the fixed or floating rate of interest can significantly affect your interest rates too. If you choose a fixed interest rate, your EMI will be fixed for the entire tenure. However, it could be expensive as it is higher than the floating interest rate. On the other hand, floating interest rates are lower and are directly affected by repo rates. Whenever repo rates are reduced, lenders have to pass on the rate cut to borrowers by reducing their interest rates.
- Opt for government schemes
To encourage homeownership and facilitate infrastructure development, the government launches various housing schemes for potential home buyers. These schemes like the Pradhan Mantri Awas Yojana and MahaRERA help people buy homes at concessional interest rates. For example, under the Pradhan Mantri Awas Yojana, the government grants subsidies on the interest rates depending on the economic category the applicant falls under.
With these tips, you can get the best interest rates and avail a home loan at affordable EMIs. Ensure to read the fine prints carefully and know all the charges associated with the housing loan while applying.