But for availing the facility, the lenders charge you the Home Loan interest.
Although the rate of interest for the Home Loan has reduced in the recent past and touched 8.35%, there are still some factors that can affect it up and down.
In the context of our discussion, let’s see of the factors that can affect Home Loan rates. When you are aware of those factors, you can help yourself in managing the interest rates smartly and make it work in your favour. Take a look!
Your CIBIL Score
The first thing analyzed by your prospective lenders while processing your Home Loan application is nothing but the Credit Score. If you have a strong CIBIL Score which is 750+ or more out of 900, nothing can stop you from enjoying lower Home Loan interest.
If you still don’t have a robust Credit Score, you can improve it by making all repayments such as credit card bills and existing loan EMIs on time. Borrowers with a higher score not only get fast loan approvals but even the lower interest rate.
The Home that You are Purchasing
The home that you want to buy may also affect the Home Loan interest rate as lenders classify properties in different areas of a city under different risk levels. If it’s your first home, lenders will be more confident to award you a lower rate. Thus, ensure to check the properties type and areas that can help you enjoy a lower Home Loan rates.
Your Home Loan Amount
Want to know your loan amount? Subtract the percentage of your down payment that you will pay (15-20%) from the price of your home to get the amount. Look for a standard home whose price is not very small and not very large. Lenders charge a higher interest rate if you opt for an exceptionally smaller or very higher Home Loan.
Down Payment Size
When it comes to the down payment, the concept is simple – the higher your down payment is the lower will be your Home Loan interest rate. Thus, even if it means using your savings and breaking your investments, strive to put a larger down payment to pay smaller EMIs and the lesser interest rate on it.
Home Loan Tenor
Did you know that even the tenor of your Home Loan can affect the Home Loan interest in the long run? Opting for a longer tenor may let you spread the loan cost such as interest and principal repayment into smaller EMIs and manage things affordably.
The Bottom Line
You are now aware of the Home Loan factors that can affect the interest rates. Assess your needs accordingly, look for the best deal and then only apply online for a Home Loan so that you manage its repayment without poking a hole in your pockets.
