If you want to secure a Home Loan in India, there are some crucial aspects you should be aware of. Firstly, you must determine if you are eligible for a loan. The best way to check your loan eligibility and the type of Housing Loan you can secure is by using a Housing Loan EMI calculator. Based on your loan requirements, you can use the calculator to determine if the loan amount you desire is affordable as per your financial condition. If you want to secure favourable conditions on your Housing Loan, you must first ensure you can make a good impression on any financial institution you approach.
In this article, we will cover all the factors you should be aware of to increase your negotiating power with financial institutions. Second, you must know the application requirements to apply for a Home Loan online successfully.
1. Credit Score
When making a good impression on financial institutions, a large factor is your credit score. Your credit score indicates to financial institutions your financial stability and ability to repay a loan. Your Home Loan application may still get approved if you have a poor credit score. However, the conditions of the loan you receive in these circumstances would not be too beneficial since the interest rate is usually quite high.
If you want favourable Home Loan conditions and some negotiating power with your financial institution, it is important to approach them with a good credit score. Financial institutions consider a credit score of 750 and above to be a good credit score.
2. Debt-To-Income Ratio
A debt-to-income ratio determines the amount of debt an individual has about their income. For example, if your monthly income is Rs. 50,000, but you already pay EMIs of Rs. 10,000 a month, your debt-to-income ratio is 20%. If you want to apply for a Housing Loan successfully, possessing a low debt-to-income ratio is important. It indicates to financial institutions you have the financial capacity to accommodate the EMIs of the Housing Loan you intend to take. If you believe your debt-to-income ratio is too high, clearing your existing debt before applying for a loan is a great way to improve your chances of success.
3. Down Payment
A down payment is the amount you pay to the financial institution when your Home Loan request is approved. If you show financial institutions your willingness and ability to make a substantial downpayment, your chances of receiving a Home Loan can improve significantly. Making a large payment shows financial institutions you are committed to your obligations. Additionally, making a large down payment often reduces the EMI amount and interest rates for a Housing Loan.
4. Employment Stability
To successfully apply for a loan, borrowers are required to provide proof of employment to financial institutions. Financial institutions usually prefer borrowers with a few years of work stability. Additionally, if an international or well-reputed company employs you, financial institutions will likely count this as a point in your favour.
Use A Housing Loan EMI Calculator Wisely
If you are certain none of the abovementioned factors will impact your chances of receiving a Home Loan, you can move to the next step. The next step involves using a Housing Loan EMI calculator to find the optimum loan plan. EMI calculators are extremely easy to use. You can find one online by visiting the website of any financial institution. To use the calculator, you must determine the loan amount, the interest rate you would like to pay, and the tenure period of the loan. The calculator will inform you of your monthly EMI based on the figures you enter. You can easily alter the figures in the calculator to explore different scenarios and analyse different outcomes. An EMI calculator also helps individuals determine their budget. Thus, it makes approaching and negotiating with financial institutions much easier since you already understand your financial capacity and the loan amount you can get with it.
Requirements For Online Application
When completing the application for your Housing Loan online, it is important to fill in all the details correctly. It is also important to provide whatever proofs or documents the financial institution requires if you want your loan application. If there are any incorrect or missing details in your application, it will be rejected, leading to a waste of time and effort.
Here are some of the details you will be expected to fill in for your Home Loan online application:
- Income
- Education Details
- Employment Details
- Estimated Property Value
- Property Details
Here are some of the supporting documents your financial institution will expect you to provide as proof:
- Identity Proof
- Address Proof
- Income Proof
- Age Proof
- Bank Statements
- Form-16
- Employment Proof
Along with your application form, individuals must also pay a processing fee for their loan application. The processing fee is usually 0.5% to 2% of the loan amount. However, you may find some financial institutions willing to waive the fee. After all your documents have been verified and the background check is completed, the financial institution will review the results and decide whether or not to grant your application.
Conclusion
To conclude, receiving a Home Loan is about ensuring you follow the right processes and indicate your trustworthiness to financial institutions. Remember to use a Housing Loan EMI calculator before approaching any financial institution if you want the best Housing Loan. It allows you to assess the affordability of a loan and determine which loan conditions suit you best. Remember to check for different loan offers; some financial institutions may offer more attractive interest rates than others. Use your EMI calculator to compare the different offers from vendors to ensure you approach the one that is guaranteed to give you success.
