Most people dream about having their own home. Thanks to the easy availability of Home Loans in India, fulfilling this dream has become easier. But not all Home loans are the same. 

Selecting the best Housing Loan in India to supplement your budget is important. Now the question is how do you select the right loan? It is where you need to analyse the features of a loan.

Low Rate of Interest 

The interest rate is one of the main features to consider when looking for the best Housing Loan in India. You need to compare the interest rates offered by different lenders before applying for a loan. If you have a stable income and good credit history, you can negotiate with a lender to avail a Home Loan at a low-interest rate. Even a small difference in your interest rate can impact your EMI and total interest outflow. 

You must remember that many banks and lenders offer a special discount on Home Loan for women. Ensure that the lender you select offers this discount. You can even avail a high-value Home Loan with low-interest rates by opting for a Joint Home Loan with a female family member as a co-borrower.

Maximum Loan Amount

The maximum loan amount offered by a bank or a lender can vary from one to another. Usually, banks in India offer about 70%-75% of the property value as the maximum loan amount. However, some banks can fund up to 90% of the property value. 

You must know clearly how much your lender is ready to offer you as the maximum loan amount. It will help you to determine how much you will have to pay as a down payment for purchasing the property. Apart from the property value, lenders also consider a few other factors in determining the maximum loan amount. These include your income, repayment capacity, and credit score.

Low Processing Fee and Other Charges

The processing fee is the charge imposed by a lender once they approve your Home Loan application. This fee covers the miscellaneous expenses incurred by the bank to process your application and provide you with the loan.

This fee varies across lenders. For self-employed borrowers, the processing fee is usually between 0.25% and 1% of the sanctioned loan amount. For salaried borrowers, the processing fee is around 0.5%.

Also Read: How To Get The Best Property Mortgage Loan: Tips And Strategies

Some lenders also impose a few other charges apart from the processing fee. These include the administration fee, legal fee, and valuation fee. You must ensure your lender is willing to forego any such charge, including the processing fee. If not, you should negotiate with your lender and reduce the charges as much as possible.

The Flexibility of Insurance Coverage 

Many banks and lenders insist Home Loan borrowers purchase property and life insurance to safeguard their interests. Property insurance can help protect your property against losses from natural calamities, such as earthquakes and floods. 

Life insurance can protect the family against the due loan amount if something untoward happens to the borrower. Most lenders include the insurance premium in the Home Loan amount.

While taking up insurance coverage can mean protection, you can also avoid it if you want to. It is because purchasing insurance with a Home Loan is not mandatory. So if you do not want to buy insurance, you must find a lender to extend this facility. 

Conclusion

Since a Home Loan is a long-term financial commitment, you must be careful about its terms and conditions. The features mentioned above will enable you to select a Home Loan effectively. 

Also Read: Determine Your Housing Loan Eligibility With Just A Few Clicks

Additionally, you should ensure that your lender is easily approachable and has a good track record of offering post-disbursal service. So start looking for the right loan to own your dream home.