A house is the most valuable asset in everyone’s life. If you’re planning to take a loan for the same, then it is good to know about your loan’s term and conditions before you sign the dotted lines:
Here are some tips for the same:
Rate of interest: Rate of interest will depends upon loan amount, your profile, your property type, it’s market value and prevailing market interest rates. Hence you must check applicable rate of interest from multiple banks before you finalize the same. Check Home Loan Interest Rates in India.
Lender type: Is your lender a bank / NBFC. Banks rates are based on base rate. However NBFCs rate are based on PLR (Prime Lending rates).
Rate Spread: In case of floating rate loans, the applicable interest rate is sum of base rate (decided by bank) and spread. Hence whenever base rates are changed, applicable rates are automatically changed (in fixed spread cases). Hence one must know the spread being offered by bank and spread type (is it fixed or variable)
Processing Fee: Depending upon the loan amount and customer profile, some lenders are ready to negotiate the processing fee. Hence, we highly recommend negotiating hard on this before finalizing the deal.
Pre-payment / Part payment penalties: In case of floating loans, generally there is no penalty for pre-payment and part payment. However it is better to get it clarified from the lender. Also in case your loan is fixed for some time, it is highly recommended to know about the penalties before-hand.