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HOW YOU CAN PREPAY YOUR HOME LOAN EASILY?

Posted on Wednesday June 9th, 2021

Getting in debt is never good because it can adversely affect your financial health and credit history as well. The prepayment facilities on a home loan offered by various lending institutions make it convenient to lower down the EMI burden making the loan journey stress free for borrowers. If anyone avails the facility of prepayment after he/she Apply For Home Loan then it will help him/her to reduce the interest burden which in turn helps to reduce the total cost of your borrowing.

A home loan prepayment means for repaying your home loan before the fixed tenure. It can be paid in two ways either completely or partially. Thus you prepay your home loan, it reduces the EMI. You also have an option of reduced tenure instead of reduced EMI while going for a home loan prepayment. It is advisable to go with it when you have surplus amount of cash with you.

Basically, you can prepay a loan when you receive your bonus from your company or any of your investments get matured. Most of the home loans have long tenure and therefore, borrowers need to pay a lot of interest rates adding up more to the overall cost of borrowing. So, by repaying the loan before its tenure can save you a lot of amount that you would have consumed on interest.

Looking at the benefits of prepayment you must be wondering how you can prepay a loan. Well, one can start with a small prepayment amount and keep adding gradually, this will help you observe the benefits and will motivate you for the new loans in future. Take a plunge into some ways which will help you to prepay your home loan.

Savings: Availing a home loan is a largest investment for everyone which lasts for minimum of 10 to 15 years. It is always good to save some amount on normal basis after paying the monthly installments. By saving this small amount for few months, you can use this amount to prepay your home loan reducing the EMI as well as tenure on your home loan.

Reduce tenure by increasing EMI: If you cannot accumulate funds by savings, you are still able to prepay the loan before tenure by increasing your monthly installments. By increasing the EMI, your loan will end soon and on the other hand it will save you a lot of money on interest rate charged by the lender.

Set the goals: As prepayment of loan, either you Apply For Home Loan Online or offline, it will ensure you a peace of mind but you should not ignore other goals as well. Along with prepayment of loan, one needs to set other financial goals to achieve financial success. It will not help you to stay motivated but also helps you to realize your financial mistakes. Moreover, it also helps you to have a clear vision to achieve your financial goals.

A prepayment should not be your single goal, focusing on other goals such as retirement and children’s education is equally important.


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WHAT BENEFITS ONE CAN ENJOY ON HOME LOAN?

Posted on Thursday May 6th, 2021

Nowadays, there has been a massive inclination in the number of home loans secured by people. This elevation has resulted of several factors among which the benefits of applying a home loan are on top of the list. Some of the different borrower-friendly schemes offered by lending institutions are also among the reasons which have accelerated the rate of home loan borrowers.

Some of the borrower-friendly home loan deals come with basic eligibility criteria, the lower rate of interest for female borrowers, and no monthly installments till possession, several discount schemes in the offer period. However, in this article, we have discussed the benefits you can enjoy when you Apply For Home Loan which has made it a popular choice among borrowers.

Benefits of applying a Home Loan:
√ Own an Asset: Purchasing your own home is not an easy job as it one of the biggest investments of one’s life. One has to pay heavy monthly installments which may not be easy on your pockets after taking a home loan. However, instead of all this, you must be happier that now you have your own house, an asset which can give you the sense of confinement and accomplishment. Having your own home is also counted as an investment as it can secure your future as in financial security.

√ Low rate of interest: Home loans are categorized under secured type of loans with a lower payable rate of interest as compared to other unsecured type of loans. The tenure on home loan goes long which can be maximum of 15-20 years and a minimum of 10 years. The rate of interest may vary from lender to lender but never goes high as other unsecured loans. Usually, the interest rates on home loan ranges from 6.70-6.95%. Hence, make yourself sure that you will be grabbing a good deal if you are planning to Apply For Home Loan Online.

√ Tax benefits: A great benefit one can enjoy by taking a home loan is the tax benefits associated with loan. According to Section 24(b) of the income tax act, a tax deduction of one lakh can be availed towards the total payable interest on the housing loan in one year after the purchase or construction of property. The rate of interest paid on home loan would be deductable in equal installments starting from the year of purchasing or construction.

√ Zero prepayment penalties: Most of the lenders charge prepayment penalties when a borrower prepays the loan but in case of loan against home, it has a lock in period which varies from lender to lender, in which payment made towards home loan after this period is never chargeable. Therefore, with this surplus money, one can pay more principal towards their home loan and lower their financial stress.

At the end, availing a home loan offers you many benefits but it is a big financial decision so, one should research well before taking a loan. Hence, borrow as per your repayment capacity and try not to default on single EMI making your loan journey hassle free.


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HOW TO GET HOME LOAN APPROVAL IN FIRST GO?

Posted on Wednesday April 21st, 2021

The biggest motivation to work hard and to save money in everyone’s life is to buy his/her own home. Buying a home is the biggest invest that comes with a financial commitment where you have to analyze your financial capacity and need to work on it. As per the current inflation in every sector, buying your own home with your saving is also a tough job and for that reason most of the people Apply For Home Loan to fulfill their dream. Applying a loan can be easy process but your loan approval totally depends upon your age, income, job stability as well as loan repayment capability.

To reiterate, eligibility criteria play a crucial role as home loan is a big financial commitment which comes with longest repayment period ranging from 15 to 20 years. Thus, the home loan lenders become much stringent while approving the home loans. If you are planning for a home loan in near future then you are advised to take some preparatory steps. To get a home loan approval in first go, you need to do some home before applying for a loan. Here, we are listing few tips to get your home loan approval in first attempt:

√ Plan a budget for Homeownership: While purchasing a home, you do not have to bear the cost of house only but there are some additional expenses while getting a loan that includes registration fee, stamp duty, GST, and charges payable to municipality. Therefore, you need to consider all these expenses involved in home purchase while planning a budget.

√ Check your credit score: Credit score is that numeric expression provided by credit bureaus based upon their credit history reflecting their financial health. A score above 700 is considered to be good representing a high creditworthiness. In case you find your score low, you should take some considerable steps to improve it before going to lender as it will minimize the risk of loan rejection.

√ Get prepare for the down payment: No home loan covers the entire amount of the property to be purchased. You need to pay a certain part of it from your pocket or savings which is known as down payment. The maximum amount one can secure from a home loan is about 80-85% of the property price. Hence, the remaining percentage of the entire cost is covered under the down payment. Since the property price is a bigger deal so arranging small percentage can also become difficult for many of us. Thus, try to get prepared for it as it makes loan approval easier.

Purchasing your home of dreams not only indicates your financial reputation but also has some of the sentimental values such as sense of pride, stability and security. Therefore, before stepping ahead to Apply For Home Loan Online or offline, you should start preparing to meet the eligibility criteria to own the home of your dreams. Thus, to get prepared and to make sure the smooth home loan approval, one should follow the above mentioned tips.


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WHAT ARE THE PROS AND CONS OF JOINT HOME LOAN?

Posted on Thursday March 4th, 2021

Joint home loan is one of the best financial products by lending institution to hedge their mortgage risk. Most of the lenders insist on joint home loan these days, even if the property to be pledged is bought in a single owner’s name. The key advantage of taking this loan is the home loan tax benefits and the other thing that is quite interesting, adding your earning or non-earning spouse as a co-applicant. If you Apply For Home Loan jointly, it makes your repayment capability higher. As every cloud has a silver lining, so do the joint home loan. Let us understand the pros and cons of this loan which are mentioned below:

Advantages of Joint Home Loan

♦ Higher loan quantum: You can apply for loan jointly with your partner, siblings or children to get your loan quantum increased substantially. Every lender sees the borrower’s net monthly income and then finalizes the loan money to be disbursed. Usually, the lending institution would offer a loan on which the monthly installment could be as high as half of the monthly income.

♦ Tax benefits: If your co-applicant is co-owner of house with you, then you can both claim the tax benefits. There is deduction from the taxable income on both the principal repayment as well as interest to be paid, hence, bringing down the overall tax liability of borrowers. Therefore, a home loan jointly allows co-applicants to double the tax deduction benefits from a single housing loan.

♦ Flexible repayment: If you are applying for home loan jointly, it is not necessary that both the applicants have to repay equally towards the principal amount and interest payment. It entirely depends upon the borrower to decide how much each of the borrowers contributes towards EMI.

Disadvantages of Joint Home Loan

♦ Delayed Documentation: As the two applicants Apply For Home Loan Online or offline, so lender will take more time to complete the documentation check. This time lapse occurs as authorities take longer time to ensure that documents submitted by applicants are genuine and not forged. The entire process of document verification is repeated two or three times depending upon the number of co-applicants who have applied for loan.

♦ Impact on CIBIL score: As the joint home loan gives you the advantage of flexibility on repayment but it also have a disadvantage because if any of the two applicants defaults on repayment then the credit score of both of the borrowers would face the brunt as any default on the EMI could negatively affect your credit history.

♦ Divorce or Demise: In case if the co-borrower decides to move out of a loan due to divorce then it is the responsibility of first applicant to repay the whole loan. In other case, if one of the co-applicants passes away then the surviving spouse have to take the charge of repaying the entire loan amount. It is advisable to avail separate life insurance policies to decrease the financial load on one applicant in case of demise or separation.


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HOW TO INCREASE YOUR HOME LOAN ELIGIBILITY?

Posted on Thursday February 18th, 2021

Nowadays, home loan market is growing with every passing day and easily available to the common masses. Though it is easily accessible, therefore, one should be aware of the loan quantum that can be approved to him/her. Thus, it is advisable to research properly and understand completely about the home loan eligibility. So, before you Apply For Home Loan it is highly recommended for you to check your eligibility as well as affordability.

Loan eligibility is a term given to specify your affordability. It reflects how much loan money you will get through home loan. The eligibility is determined by various factors which include borrower’s age, income, employment, CIBIL score and many more depending upon the norms of particular lending institution. The factors that help in enhancing the home eligibility involves a good repayment history, regular source of income, co-applicant/co-borrower, low credit utilization ratio etc.

There are some tips and tricks to increase your home loan eligibility and to secure a loan quantum that you desire. In this article, we are discussing some tips to enhance your eligibility which is mentioned below:

→ Adding a co-applicant: Signing a home loan agreement with your spouse or your partner as a co-borrower can increase your eligibility. By doing so, you can also get approved for higher loan quantum from the particular financial institution. As a matter of fact, co-borrower can be your life partner, your sibling or any other family members. Adding co-applicant can increase your EMI affordability and lender find it more secure to lend you the money. Some of the lenders also get ready to lend a loan at comparatively low rate of interest.

→ Adding second source of income: Another source of income can help you to increase your eligibility for home loan. A second source of income can be your rental income, part-time job, rent from farms, share etc. Adding any of these on top of your monthly income reflects your good financial health and hence, lending institution find it secure to approve you a higher loan quantum.

→ Improve your credit score: It is one of the key factors that decide your loan approval or rejection either you Apply For Home Loan Online or offline. It is one of the most important components which decide the loan money which will be approved for you. Lenders find it secure to lend money to the person having good credit score as it indicates good repayment history of yours. Therefore, if you are planning to take a home loan, check your CIBIL score first. If you find it low, then try to improve it.

→ Repay your existing debts: The repayment of existing debts not only help you to build a good CIBIL score but also help you to decrease the credit utilization ratio which further enhances your home loan eligibility. Moreover, having some additional savings and investments can also add up to your eligibility.

Hence, these are some of the tips and tricks that you can follow to increase your Home Loan Eligibility and make the loan journey easy and convenient for you.