Home Loan EMI: Keep these 10 things in mind while taking a home loan, paying the installment will become easy..
Home loan Taking a home loan is easy, but repaying it on time can be challenging. Most people find it difficult to repay interest along with the principal. When unable to repay the loan, they become defaulters to banks, which results in a bad credit score.
A poor credit score makes it difficult to get another loan in the future. Therefore, taking a home loan is not a bad thing, but it is important to keep a few things in mind. Proper planning, timely payment of installments and budget management can simplify this process.
-Interest rate-
The interest rate should be kept in mind while taking a home loan, as it determines your EMI and remains important for you in the long run. With the right interest rate, the EMI will be according to your capacity and loan repayment will be easy.
-Keep in mind the loan tenure-
You have to decide in how many years you will repay the full loan amount. It is obvious that if you take a loan for fewer years, the EMI will be higher. If you take a loan for more years, the EMI will be lower. But a longer period of years means more interest. This will be heavy on your pocket. Now you have to decide whether to pay more interest or get free from debt soon by paying more EMI. (Keep in mind the loan tenure)
-Use the calculator-
Never take a loan in a hurry or a rush. That is, before taking a loan (home loan), one has to think once with a cool mind. Before that, one has to sit at home with a calculator and calculate the EMI. However, nowadays every bank has an online calculator with the help of which you will know the EMI. Calculate your EMI by looking at the rest of the expenses and taking the loan.
-Check the processing fee on a home loan-
Banks charge processing fees on home loans. It ranges from about half percent to 1 percent. Some banks also waive it off, like SBI is currently offering home loans with Zero Processing Fees. Before taking a loan, you have to decide that the processing fee will not harm your pocket. Say yes to the loan only after calculating this fee. (Check the processing fee on the home loan)
-Check the hidden cost too-
There are many types of hidden costs in a loan which are not told earlier. When you come to know later, it is too late. This may include legal fees, technical valuation charges, franking fee, documentation fee, adjudication fee, notary fee, loan prepayment fee, switch fee etc. These fees can cost you heavily.
-Keep a good credit score-
In the world of loans, only the one whose credit score is good is the king. Credit score means how quickly you return the loan you take. The credit score improves only when the loan is returned without any delay and default. If the credit score is above 750, it is considered good. On this basis, the loan will be available soon. Even if the credit score is low, the loan is available but there is a problem.
-Keep the financial condition good-
It is necessary to have a strong financial condition to get a loan. The bank analyzes your financial condition before giving a loan. The documents and property you submit to the bank are evaluated. Only when your financial condition is satisfactory, the loan amount is decided. This process ensures the safety of the loan.
-Keep the documents safe-
Keep your documents safe to get a loan. Keep income statement, salary slip, Form 16, bank statement, latest IT return, age proof, address proof, photo identity card, property documents with you. This will facilitate in getting the loan soon.
-Work with your mind instead of your emotions-
Whenever you have to take a loan (home loan), do not get carried away by emotions but work with your mind. It should not happen that you take a loan by getting carried away by emotions. Later you come to know that you did not need the loan or you are not able to repay the loan. In such a situation, all the plans will go to waste and you can get trapped in the debt trap.
-Read the terms and conditions-
Before taking a loan, read the 'Terms and conditions' column carefully. The bank's terms and conditions may not match your expectations, due to which you may get trapped in financial difficulties. There is no option to correct the mistake while taking a loan. Therefore, it is better to understand all the terms and conditions beforehand, so that there is no problem later.
Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
