With the number of options available in the market, choosing the right lender for your long-term Home Loan is a challenging task. Here is what you should keep in mind while selecting the right lender.
The competition has become intense with the Public sector banks, private banks, and NBFCs (Non-Banking Financial Companies) providing you with some of the Best Home Loan Offers. How do you choose the best lender from such a wide range of options? We shall make it easy for you.
The property type
Today, you have banks financing almost all kinds of Home Loans. They include the following:
- Purchase of new flat or house
- Purchase of flat or house under construction
- Purchase of old apartments and houses
- Construct a house on your land
- Purchase a plot and then construct a house
- Repairs and renovations
- Balance transfer of existing Home Loan
Choose your property type and then search for the right lender. If you wish to purchase a plot and then construct a house on it, you have comparatively limited options. Choose the lender who is aggressive in financing such loans. You end up getting a better deal.
Location of the property
Finalise where you want to purchase or construct your house. If the location is different from the place where you presently work and reside, it is better to opt for the lender who has a branch office at both the sites. You will find it easy to easy to deal with lenders who have an active presence at both the places. Most of the Public Sector banks and the top private banks offer these facilities. However, nowadays you have the facility of applying for loans online. Nevertheless, it makes a difference if your lender has a presence at both the locations.
Check up your credit history
An excellent credit record should not be an issue at all. It is easy to get loans when you have a good credit history. However, if you do not have a satisfactory one, you have limited options before you. You might have to opt for the Housing Finance Companies (HFCs) and the NBFCs as they cater to such cases. They might charge a higher rate of interest, but the chances of approval of loans are also better as compared to the public sector banks.
Loan tenure – Compare various options
Today, many banks have loan products with repayment periods stretching up to 30 years. You have banks giving moratorium of up to 18 months if you go for a house under construction. Some of the new generation banks have step-up loan facilities where your EMI is low in the initial stages. As your income grows, so does your EMI amount. Check out beforehand the options available to you. You can take the help of home loan service providers like MyMoneyMantra. You get a variety of options to choose from when you avail the services of such loan providers. You can compare various loan products and check their features on a single screen instead of visiting the individual bank websites.
Beware of the loan brokers
Brokers earn their commission from the banks when they direct customers to them. Such brokers can be handy at times, but you have to choose them with care. Some of them might refer you to the wrong lender. Therefore, it is better to do a thorough check on the brokers by going through their reviews. It is also better if you approach reputed professional loan service providers like MyMoneyMantra. You get the right kind of guidance from them.
Transparency in interest rates
With the introduction of online banking, the interest rates have become transparent throughout the industry. However, the banks are a better bet because they have to publish their Marginal Cost of Funds Based Lending Rate (MCLR) at regular intervals compulsorily. No bank can lend below their MCLR. It is not the case with the HFCs and NBFCs who still follow the Prime Lending Rate (PLR) concept. The MCLR is a market-driven rate whereas the PLR is not. Therefore, you have a higher degree of transparency when you deal with the public and private sector banks.
Processing times
You cannot wait for an inordinately long time to receive the approval of your Home Loans. Every bank has a time frame for processing and approving Home Loans. Statistics show that the private banks are faster than their public sector counterparts in this regard.
We have seen some of the essential aspects you should look for in a lender when you opt for a long-term loan. You are entering into a relationship that can last up to 30 years. Hence, it is advisable you choose your long-term lender with care.
Also Read: How Does the Type of Property Impact Your Home Loan Eligibility?
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 70+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.
Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.