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.

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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.

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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.

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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.

 

Is taking a housing loan on this festival season a good idea?

With the increase in the price of the property, it has become almost impossible to buy a home entirely on your savings. And, this is where home loans come to your help. Getting a home loan is the best way to fulfil your dream of owning a house. And the best time of the year to apply for a home loan is during the festive season. We have listed a few reasons suggesting why you should take a home loan during this festive season.

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Due to various customs and beliefs, people prefer to make huge investments during Diwali. Therefore, banks offer a range of deals and offer to make home loans look attractive. Not only banks but builders also come up with incredible offers to attract customers. During Diwali, getting as huge as a ten percent discount from the builders is quite common. If the festive season ends, there are chances that the banks will do away with festive offers and increase the home loan interest rates. So, it’s better to apply during the festive season.

Lastly, don’t get sidetracked with attractive offers. When searching for a home loan, it is important to pay attention to three attributes, interest rates, tenure, and fees. These factors will decide how much you will have to pay every month once the festive season ends. Therefore, instead of getting distracted by the seemingly attractive offers, evaluate your options carefully to make a well-informed decision. So, hurry up and grab the deal.

Additional Reading:-Why taking a home loan on this festival season is a good idea?

Top Up Loan vs. Personal Loan: Which is Better

An additional loan amount availed on your existing home loan is referred to as a top up. If you have recently availed a home loan and you require funds for renovation or extension of your house, then you have two options either you can avail top up on existing home loan or you can apply for a personal loan.

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Top up loan is a better option because its approval and disbursal process is quick as you are an existing customer of the bank. Top up loan is available for a longer tenure i.e. the remaining tenure of your home loan, whereas personal loan can be availed only for a period ranging up to 5 years. Interest rate on top-up loan is low in comparison to a personal loan. Amount of loan in top-up loan is decided based upon your existing home loan outstanding and in personal loan you can apply for loan amount as per your requirement. You should opt for a top-up loan if you require funds immediately also your fund requirement is not high. On the other hand if your fund requirement is high and you can bear the burden of extra resultant EMI, then you can apply for a personal loan.

RELATED: Top Up Loan vs. Personal Loan: Which Option Should You Back

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.

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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

Profits of Getting Home Loan From MyLoanCare

Everyone dreams of purchasing their own house. With the ever-increasing property prices, people find it difficult to fulfill their dream. If you too have a dream of buying your own house and you don’t have the required funds, then you can avail a home loan. Taking a Low interest home loan has become easy with numerous banks and NBFCs offering home loan at affordable rates.

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You can apply for a home loan offline as well as online through MyLoanCare. Benefits of applying for a home loan through MyLoanCare are as follows: Different lenders charge a different interest rate. You can compare the interest rate of different lenders by visiting MyLoanCare website. If you are applying for a home loan online through MyLoanCare, then you don’t need to visit the bank and you can apply for it by sitting at home. MyLoanCare has various online tools like eligibility and EMI calculator, these tools are absolutely free. You can use them to check your loan amount eligibility and affordability i.e. whether the EMIs are pocket-friendly or not. When you apply for a home loan through MyLoanCare then a loan officer contacts you to explain the process and offers as per your eligibility.

Loan officer coordinates with you and partner banks throughout the loan process to ensure quick approval of your loan application. If you apply through MyLoanCare then you get attractive cashback also. MyLoanCare has a mobile app too, you can use it to apply for loans and cards, track loan status and apply for cashback, etc. So, keeping in mind the myriad of benefits discussed above, apply for a home loan through MyLoanCare.

RELATED: Benefits of Taking Home Loan From MyLoanCare

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.

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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