How to Get the Lowest Home Loan Interest Rate in 2022?
Do you want to get your own home but lack enough funds? A loan from the best home loan lenders in India can help you purchase the house that you desire. However, it doesn’t mean you can just go around and pick any random mortgage plan. Because if you do that, you might end up paying more money than usual. Interest rate is one of the biggest aspects that decide the total cost of getting a housing loan. So, if you can get a house loan with a lower interest rate, you can save a lot of money in the long term. In this article, we will give you some of the best tips that will help you secure a loan at a lower interest rate. So, let’s dig in.
Learn how to sell a house fast without a realtor! Our team at Mr. Homebuyer can help you through the entire process – from start to finish. Get started today!
Factors that Affect the Home Loan Interest Rate:
There are multiple factors that can influence the interest rate of a housing loan plan. Here is a list of factors that decide whether you are eligible to get a low interest home loan from your lender:
- Your age
- Your job profile and annual income
- The nature of your employment
- The risk policy of the lender
- Condition of the financial market
- Your current debts
- Your credit score and credit history
- Value of the property you are looking to purchase
- The location of your potential home
Banks and other financial institutions evaluate all these factors to decide the interest rate of the mortgage, which, in turn, affects the EMI.
Tips for Getting a Home Loan with a Low-interest Rate:
Just knowing about the aspects that affect the loan interest rate is not enough. You have to understand how these factors influence the loan offers. Only after that can you actively use various methods to negotiate a housing loan plan with the lowest possible rate of interest. Let’s take a look at a few tips that will help you get the best housing loan plan.
1) Maintain a Good Credit Score:
A good credit score shows that you repay any borrowed money in a timely manner. A credit score is something that you accumulate over a certain period. This is definitely not something that you can forge within a short time. That’s why every individual should maintain a good credit score right from the beginning.
Did you buy a gadget or a service on EMI? Are you using a credit card and paying the borrowed money on time? Are you paying the installments of the personal loan or car loan in time? Every single one of these financial activities affects your overall credit score.
Whether it’s a bank or a home loan finance company, they will pay attention to your credit score to see how responsible you are with the money you borrow. If you have a good track record of repaying installments and have a credit score over 750, you can easily get a housing loan at a low-interest rate.
2) Research on Different Banks and Financial Institutions:
Thanks to digitalization, every bank and finance company maintains an online presence via a website, social media, and other channels. All you have to do is open your browser, go to the official websites of different lenders, and check their home loan schemes.
Many of these banks’ websites also have an EMI calculator that allows visitors to calculate an estimated EMI for different home loan plans. In other words, there is no need to rush and get a loan from the first bank you see. Use the internet to compare different loan plans and their interest rates to get the best housing loan available in India.
3) Add More Money to the Down Payment:
Just because you are eligible to get a home loan of a hefty sum, it doesn’t mean you should squeeze out the maximum amount without batting an eye. It will only burden you with more interest and a higher EMI.
Often, the lender will provide you with a loan amount that equals 75-90 percent of your chosen property’s value. But instead of taking the whole 90% of the property’s value from the bank, you should borrow an amount equal to only 70% of the total property’s value if you have a way to cover the rest.
Lenders often sanction loans at lower interest rates if an individual pays more money as the down payment. Talk to your bank and see if they are ready to lower the interest rate of the mortgage if you agree to make a bigger down payment. This way, you can get the best home loan available in the market.
4) Check the Loan Plans with Shorter Tenure:
People generally choose a home loan plan with a longer tenure to pay a lower EMI every month. And, of course, many of them are fully aware that they will be paying more money in overall interest. What they don’t know is that the lender increases the interest rates of the mortgages with longer tenure because the lenders take more risk by allowing the recipients to keep the borrowed money for a longer period.
So, if you have the financial freedom to repay the borrowed money within 20 years, don’t drag the tenure to 30 years. Borrow money for a shorter tenure, and you will get a low-interest home loan with ease.
Conclusion: Getting the Low Home Loan Interest Rate:
We are living in the 21st century, where you can get all kinds of information with just a few clicks. All you have to do is open the browser, and you will be able to access all the publicly available data about different financial institutions and their home loan plans. You can easily learn more about the factors that are affecting the interest rate of a housing loan plan. Once you understand the intricate aspects, you can easily get a housing loan by incorporating the tips we have mentioned in this guide. So, collect the necessary information, create a solid plan, and then contact your targeted banks. This way, you can easily squeeze out a mortgage at a low-interest rate from the best home loan lenders in India.