Follow These Steps To Choose Home Loan Safely


Buying a home is exciting and a dream to many, especially when house prices are increasing daily. Before buying your first home, make sure you have the funds to make the down payment or apply for a loan. You must research for the right home loan vendor with attractive prices. Compare multiple loans in the market to understand the interest rates and other loan policies. If you want to know the factors affecting home loan applications and the safest way to choose the right vendor, read this article.

Things to keep in mind before selecting a home loan in India

While applying for a home loan, here are a few points you must remember:

Rate of Interest

As you may know, the home loan interest rates vary from one lender to another. It may depend on the credit score, bank policies and many other factors. One must choose the right loan policy to get exciting internet rates. Try to get the lowest interest rate after comparing different loans.

Tenure of the loan

Choosing an optimal loan tenure is very crucial. If the tenor of the loan is less, the EMI amount increases and if the tenor of the loan is high, there will be a high-interest outflow. A loan tenure that suits the monthly income inflow must be chosen.

Principal amount required

Buying a house is an investment. As the requirement for funds is high, the loan amount should be chosen based on an individual’s monthly or annual income.

Check your eligibility

The eligibility criteria for a home loan vary for each vendor. The eligibility criteria are:

  • The borrower should be salaried or self-employed and have a regular income. The minimum income for applicants living in Delhi, Mumbai, Bangalore, Pune, and Chennai is Rs.20,000 per month, and the minimum income for residents of other cities is Rs.15,000 per month.
  • The existing EMI payments should not be high.
  • Salaried persons should be between 18 to 60 years of age. Self-employed customers should be between 18 to 65 years of age.
  • Submit all the documents without fail. The required documentation includes identity, income, age, address, and more.

After analysing the details submitted, while applying for a loan, the loan is approved or rejected. If the eligibility criteria are not met, the customers are rejected for a loan.

Calculate EMI

Once the principal amount is chosen, you can calculate the monthly EMI outflows. There are many EMI calculators online which will help to know the monthly repayment amount. Make sure that the repayment amount is within your capacity so that there will not be any burden later.

Maintain good credit score

Best deals on home loans are provided to customers with good credit scores. A credit score is a parameter to check the borrower’s repayment capacity. With a good credit score, getting competitive loan offers is easy. To maintain a high credit score, repay your EMIs on time. Not repaying loans up to the due date negatively affects the credit score.

Read the terms and conditions

Sign the loan agreement only after you have reviewed all the terms and conditions mentioned in the policy. Most of the time, hidden charges and additional processing fee is mentioned in the loan agreement even though the lowest home loan interest rate is charged. Borrowers have faced losses because of blindly signing the loan agreement.

Approval of loan

After completing all the above steps, you will have a fruitful result of approval. The loan is rejected if the criteria are not met. Approval or rejection of a loan depends on various factors. A customer should make sure that there is no error on their side to complete the process smoothly.

Verification of the property

Verification allows banks to confirm the value and provide a loan only within the limit. By verifying the property, a guarantee is created for the lender. The loan is against property, so verification is compulsory in most banks.

Loan disbursal

Disbursal of a loan is the final step in availing of the loan. When all the documents are clear, the bank or financial institution provides the loan amount to the customer through a check or bank transfer.


The borrower must be vigilant while choosing and applying for a loan. Apart from choosing the loan amount and lowest home loan interest rate, a lender with good service is also important for seamless application and repayment. The tips mentioned above will help in completing the loan application smoothly.

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