Home buying is a very big and usually once in a life-time decision that involves a huge sum of money. So,whenever you are planning to buy your home, it is always good to apply for a home loan.
In today's world, a lot of young people dream of owning a house but find it difficult to turn their dream into reality as their personal resources don't allow them to do so. Buying a home seems to be one of the challenging tasks as a large amount of fund is required. Here Home loans play a vital role in driving you through the path of accomplishing your goal.
First of all, you must analyse your income and expenditures and then come to a loan figure, whose EMI you can afford to pay per month. You can also negotiate on interest rate and other terms of lending bank, if you are its old customer & hold a decent credit score.
For getting a home loan you are required to apply for home loan with chosen lender. The lender will go through your home loan application and decide upon your home loan eligibility based on various factors including your income, age, credit score, financial background, property location, nature of employment, etc. and let you know the loan amount, interest rate and loan tenure that you are entitled to. If the lender is satisfied then only you can get the desired loan amount.
Private Sector Banks are the banks where greater parts of share or equity are not held by the government but by private share holders. City Union Bank is the oldest bank formed in 1901. IDFC Bank and Bandhan Banks are newly formed banks established in 2015. The largest Private Sector Bank is HDFC Bank as per Market Cap. Currently, 21 Private Sector Banks are operating in India.
In the past few decades, various banks, housing finance companies and other financial institutions across the country have started offering easy housing loan facility on easy terms and at attractive interest rates to the prospective home buyers. Listed below are the Private Sector Banks who are offering you Home Loan along with their interest rates and loan tenure:
|Axis Bank||8.55% - 9.40%||30 Years|
|Bandhan Bank||8.75%-12.00%||15 Years|
|Catholic Syrian Bank||8.80% - 9.05%||20 Years|
|City Union Bank||10.50% - 13.00%||15 Years|
|Dcb Bank||10.24%||20 Years|
|Dhanalakshmi Bank||9.80% - 10.50%||20 Years|
|Federal Bank||8.55% - 8.70%||30 Years|
|Hdfc Bank||8.00% to 8.80%||30 Years|
|Icici Bank||8.25% - 9.35%||30 Years|
|Idfc Bank||8.15%||30 Years|
|Jammu And Kashmir Bank||8.45% to 8.80%||15 Years|
|Indusind Bank||8.80% to 9.55%||30 Years|
|Karnataka Bank||8.59%-9.14%||30 Years|
|Karur Vysya Bank||8.65%-12.50%||25 Years|
|Kotak Mahindra Bank||8.60% to 9.40%||20 Years|
Home Loan Eligibility: Lender assess your home loan eligibility through various parameters such as your age, income, credit history, CIBIL Score, employment status, financial background, assets & liabilities, loan amount and tenure of loan.
Type of Interest Rate: Whether you are applying for a fixed or floating rate of interest. In fixed interest rate you have to pay fixed EMIs during entire loan tenure while in floating rate, interest rate changes along with change in market conditions. Hence, your EMI will keep changing.
Fine Print: Fine print i.e. loan agreement should be gone through very carefully before signing. Check for all the terms and conditions in detail in advance. In case of any query, better consult the lender.
Document Checklist: You need to submit various documents along with your home loan application which are Identity Proof, address proof, age proof, income proof, IT Returns, bank statements, copy of title of property documents, etc. You must know all these document checklist well in advance and keep them ready before applying for home loan.
EMI stands for Equated Monthly Instalment that you need to pay each month to the lender against home loan availed from it. It will reduce your loan liability on monthly basis. EMI consist of Principal and Accrued Interest on it. Calculation of EMI is based upon the pricipal, interest rate and the loan tenure.
Relation between EMI & Loan Principal, Interest Rate and Loan Tenure
Larger portion of EMI will go towards paying the interest and a small fraction of your EMI goes towards your principal in the initial years.
It has been seen that lenders often try to suggest you to opt for a longer tenure home loan since it will be safe for them to get their money back since you can easily pay a lower EMI. But you should decide the tenure which is suitable to you.
1. Your Credit Score is not upto the MarkNot having a good credit score is one of the important reasons of home loan rejection. You are suggested to first check your credit score before applying for a home loan. If you have a low credit score, then there are many chances that your loan application will get rejected.
So if you have a poor credit score then you should first concentrate on improving your credit score to at least above 750 mark and then should you apply for home loan.
2. You are having Unstable Job
In case, you are changing your job frequently and there is no job stability for you in the past then the lender will hesitate in approving your home loan application. You must understand here that if there is no stability in your job then the lender may consider it as your unstable behaviour.
Job Stability is very primary concern for the lenders' point of view. Some of the lenders also place criteria of having minimum employment of continuous 3 years in your existing company.
Therefore, in order to stay away from home loan rejections, you must remain stable with your job.
3. Your Home Loan Application has been rejected before by other lenders
It may be a scenario that your home loan application has been rejected before because of any of the reasons then there are many chances that the lender to which you are placing your home loan application, also rejects your case.
4. You Asked for Larger tenure
If you have asked for loan for higher tenure which is not compatible with your loan eligibility then there are chances that your application could get rejected.
Given below the stepwise process to be followed in order to deal with home loan rejection properly and get your home loan approved ultimately by the lender:
Finally, after getting your home loan application approved, we would advise you to go through the fine print i.e. a home loan agreement very carefully. It is a legal document and therefore often incomprehensible. You must do your research and home work well beforehand in order to avoid any nasty surprises later. Whichever lender you choose, do not forget that you can negotiate on the interest rate. So always to talk to the lender & try to negotiate on interest rate, especially when you are an old customer having a healthy & long relationship with the bank.