Which One is Better: Fixed & FLoating Home Loan Rates

Getting a home loan has become very easy nowadays. However, it involves a series of decision which can have an impact on your life for years or even decades. The first and foremost thing that will bother you is whether to go for a fixed interest rate or floating interest rate. A fixed home loan interest rate remains the same throughout the loan tenure, whereas a floating rate keeps on changing as per market conditions.

Image result for Home Loan interest rates: Fixed or floating – Which one is better?

A fixed interest rate is a good option for those who are good at budgeting and want a fixed repayment schedule. One of the major disadvantages of fixed interest rates is that it is usually 0.5-2.5% points higher than the floating rate home loan. On the other hand, a floating rate home loan is cheaper than the fixed interest rates. But, you can only benefit by choosing a floating rate home loan if the interest rate does not exceed 11.5%. You also have the option to choose semi-fixed interest rate. In this kind of loan, the interest rate remains fixed for the first few years and then it changes to a floating rate. The type of interest rate you choose depends on several factors. So, if you expect interest rates to increase in the future, you should opt for a fixed interest rate home loan. If rates have been on the rise over the past few years and the prediction is for a fall in loan interest rates soon, then you must opt for floating interest rate to reap the benefits.

Advertisements

How to Repay your home loan faster

Buying a home is a dream for many of us, but due to the high prices, only a few can afford to pay such a whopping amount. In such situations, buyers turn to banks for home loans. However, opting for a house loan is not that easy as the EMIs last for at least a decade and add to the burden for a majority.  But, don’t worry, we have listed a few tips that can help you to repay your home loan faster. You can opt for a higher EMI. It will help to reduce the loan tenure which means that the total interest that you’re supposed to pay to the lender also goes down. Further, home loan buyers also have the option to prepay the entire or part of the outstanding loan amount. Windfalls like bonus or maturity proceeds from insurance policies should be used to prepay a part of the home loan from time to time.

Image result for home loan

Next option is that you can opt for a balance transfer. Under this option, you can transfer the entire outstanding loan amount to another lender at a lower rate of interest and other better terms and conditions. Lastly, you also have the option to maximize the down payment. Making a higher down payment when obtaining a home loan can reduce the principal amount. A lower principal amount means lower interest and EMI payments. So, in case you are struggling with debt-burden, take into account the above-mentioned steps to reduce your home loan interest rate burden. Also, don’t miss your EMI payments as it can severely affect your credit score.

 

Banks vs NBFCs: Offers lowest home loan rates

A common dilemma faced by potential borrowers is where to apply for a home loan. Should they go to a bank, or approach a non-banking financial company? Both are financial entities that offer lucrative deals to customers with all kinds of borrowing needs. However, it is important that you should first clearly understand the differences between the two.

Home-Loans

One of the major difference is that these two institutions are managed by separate government agencies. While the RBI keeps a check on the banks, the Companies Act regulates NBFCs. No NBFCs offer overdraft facilities. As far as banks are concerned, only a handful few offer overdraft facilities. While choosing between a bank and an NBFC, you should first compare interest rates. Choose the one offering the lowest interest rates with better offers and terms & conditions. Further, a credit score of 650 and above is considered suitable to obtain loans at better interest rates.

However, customers with a lower score may find loans from NBFCs to be less stringent in terms of eligibility requirements. Plus, documents required for home loans are minimum when it comes to NBFCs. The procedure in the case of banks is more cumbersome. State Bank of India (SBI) offers home loan at the lowest interest rate of 8.65% onwards, with special discounted rates for women borrowers. Other banks such as Axis Bank and Citibank also offer home loans at affordable interest rates. Hence, both banks and NBFCs have their advantages and a final decision must be made keeping in mind the interest rates, charges, credit score, and the loan disbursal timelines.

RELATED:Banks vs NBFCs: Who provide the lowest home loan rates

Things you keep in mind while applying for a home loan

Purchasing a house of your own can be quite stressful due to the rising prices of the property. But, if you keep few things in mind, you can get a home loan without any hassle. First of all, you should check your credit score. A score of 700+ is considered suitable for a home loan.

Image result for home loans

If your credit score is good,banks will give you a loan at attractive interest rates. Next, you should compare interest rates across various lenders. Interest rates varies widely from lender to lender, so explore your options. Also, check for additional charges such as administrative and service charges or processing fees before applying for a home loan. Keep all the important documents ready before applying for a home loan. This will help to speed up loan processing.

Further, ask questions if you have any doubts, because it is very important to know every term and condition mentioned in the loan agreement. For your satisfaction clear out everything beforehand and your dream home will be yours in a hassle free manner. So, if you are planning to take a home loan,make sure to consider the above-mentioned tips for easy approval of your loan application.

RELATED:—- 7 Crucial things to remember in mind while applying for a home loan

Buying House in Hyderabad? Check Home Loan Offers

Hyderabad located in Southern India is a major IT hub, with several upscale restaurants and monuments to visit. With the rapid growth, people from across the country have come down to settle in this city. Growing population has led to an increase in demand for own houses in the city.

home

If you are looking for a home loan and you don’t have enough funds for same, then you can avail a home loan. There are numerous lenders offering home loan in Hyderabad. Following points will help you in choosing the best loans for you: Interest rates on home loan vary across lenders, so always compare interest rates before applying for a loan. To ensure EMI are affordable and pocket-friendly, use online EMI calculator to calculate prospective EMIs. Home loan is a long-term loan, so it is pertinent you choose a service provider with a good sales history and better customer service to avoid any unreasonable charges later on. Credit score is a measure of creditworthiness. It helps lenders in deciding whether to process your loan application or not. Generally, a credit score of 650 and above is considered good. If your credit score is good, you can negotiate with the lender regarding interest rates being offered and ask for a processing fee waiver. You can apply for a home loan online through online aggregators. For a hassle-free application and approval of your loan keep above mentioned points in mind.

Buying House in Hyderabad? Check Home Loan Offers Before you begin your Search

A reliable Home Loan finance company – MyLoanCare

If you are considering when and how to apply for a home loan, don’t worry, MyLoanCare Home Loan is here to lend a helping hand in your home loan search process. MyLoanCare is one of the most trusted and bank neutral platforms that allows you to analyze and compare various home loan deals offered by top banks and housing finance companies in India.

Image result for home loans

It works closely with the partner banks to get the best home loan offers, attractive discounts, lower interest rates and a superior customer service. Some of the leading home loan partners are SBI, HDFC, ICICI Bank, Axis Bank, Citibank and PNB Housing Finance.You can use the home loan EMI calculator on their website to assess your repayment capacity. You also have the option to use the home loan eligibility calculator which enables you to view the types of home loans you are eligible for and helps you assess your eligibility for home loan online. MyLoanCare offers completely free, doorstep services to make the process hassle free and easy for the customers. Also, you get the best home loan quotes based upon your requirements. To apply for a home loan, you can visit myloancare.in or download our app MyLoanCare from Google Play Store.

Also Read : Home buying just got easy with MyLoanCare—a reliable Home Loan finance company 

What to Consider Before Home Loan Refinancing

Refinancing your home loan means replacing your existing home loan with a new home loan with different terms and conditions. If you feel your existing rate of interest is high, then you can opt for refinancing your home loan. Besides interest rates, there may be several other factors, such as the desire to increase your loan amount or tenure, unsatisfactory service from existing lender, etc. which may prompt you to refinance your home loan.  

Home Loan interest rates

Following are some of the important things you need to consider before you decide to refinance your loan: Choose to refinance your home loan only if the new loan is offered at a lower rate of interest as it will help in savings on cost in the form of reduced interest payment. Different costs are also involved in refinancing your home loan. The various types of cost include: processing charges, foreclosure charges, legal charges, and application charges for the new loan. So, always compare costs and benefits, and opt for refinancing only when benefits outweigh costs. If due to higher EMI, you are finding it difficult to meet your expenses, you can choose to refinance your loan with a new loan of higher tenure to reduce your monthly EMI. Home loans are offered at both floating rate and fixed rate.

After thoroughly studying the economic conditions, you can choose the suitable option for you. The decision to refinance your home loan has long-term implications and should not be taken in a hurry. So, things you choose to refinance your home loan only after a detailed comparative analysis of aforesaid things.