Whatever you buy you want to buy the best whether it is apparel, gadgets, electronic appliances or even your daily grocery. Even in case of home loans, you want to avail the best loan so that you can easily repay the loan and become the owner of a property at the same time.
While there are a lot of home loan at low interest rate offers available in the market, to select the best loan you should look at some factors. These factors act as parameters to judge the loan to be the best. Five such important parameters include the following –
The amount of loan available
You should check the amount of loan which you can avail for buying your home. Different lenders have different eligibility criteria. The amount of loan you can avail depends on your eligibility criteria. Find out which lender is offering you how much loan and then shortlist lenders allowing you the quantum of loan you seek.
Type of interest charged and its rate
Home loans might be available on fixed rates as well as on floating rates. While fixed rates remain same over the loan tenure, floating rates change with a change in the economy. If you think that home loan interest rates would fall in future, choose home loans which charge interest on a floating basis.
After selecting the type of interest for the loan, also look at the rate. Different lenders charge different rates of interest on the same loan. Choose a lender charging the lowest interest so that
The fees and charges associated with the loan
Interest is not the only additional cost you pay for the loan. There are other fees and charges too like processing fee, late payment fee, prepayment fee, etc. Compare these fees and charges of different loans to find the best loan which has the lowest charges.
The facility of prepayment and foreclosure
Home loans are long term loans which might run up to 30 years. In the meantime, if you have surplus funds in your hands, you might want to make an additional payment toward the loan to reduce the outstanding liability. This is called prepayment. Alternatively, you might also want to pay off the loan completely before the stipulated tenure comes to an end which is called foreclosure of the loan. Though home loans allow prepayments and foreclosures, you should check the terms and conditions associated with them. The best loan should provide these facilities after a short duration and there should be no charges on them.
Reviews from existing customers
If you want to choose the best home loan, you can also check the reviews of customers who have already availed of a home loan from the lender. The more the positive reviews the better the loan would be.
These are the five main factors which you should consider if you want to buy the best home loan.