Guide to Avail Housing Loan at Lowest Interest Rates in 2021
The home loan interest rate in India is at its lowest in 15 years. The same is accredited to repo rate cuts and other accommodative stances taken by the government to boost the economy.
While most financial institutions are extending housing loan at an interest of less than 7%, first time home buyers are looking for ways to lower their interest burden in 2021 further. In fact, some strategies can help them make it a success and help them manage their debt easily.
Ways to secure a housing loan at the lowest interest rate
These pointers below highlight how new can avail a loan at competitive rates.
- Increase existing CIBIL score
By increasing their credit score, individuals can improve their home loan eligibility to a great extent. Generally, lenders prefer applicants with a credit score of above 750 and consider them to be more creditworthy than others. This proves helpful in securing a high loan value at a lower rate of interest. One can increase the current CIBIL score by maintaining a low credit utilisation ratio, say, 30% – 40% and keeping older credit card accounts active.
- Repay existing debt
Paying off existing loans and ensuring timely payment of credit card bills home loan borrowers can increase their scope of securing the lowest home loan interest rate in 2021. Such a habit represents their repayment capability in a better way and convinces lenders of their creditworthiness.
- Maintain lower FOIR
Typically, a FOIR of less than 50% works in favour of applicants. With the help of FOIR, lenders can determine applicants’ existing financial liability. As a result, it helps gauge whether they would manage home loan EMI repayment on time or not.
- Pick a short loan tenor
By selecting a shorter loan tenor, individuals can increase their scope of availing loan at competitive rates. It will also help them to repay their loan faster. However, applicants should pick a loan tenor based on their repayment capability. To ascertain an ideal repayment schedule as per one’s current financial standing, an applicant may consider using a home loan EMI calculator.
- Consider a property with high resale value
Most lenders are likely to approve a loan application if the property in question has a high resale value. Also, they are more willing to extend a high loan value at a lower interest rate. To avail these benefits, individuals must get the property appraised and revalued before purchasing it.
- Apply for a joint home loan
By co-applying for a housing loan, one can increase the scope of getting a high loan value at a lower rate of interest. However, this works out best if the co-applicant has a high credit score and a stable income source.
- Compare rates and additional charges
Another proven way to avail credit at a competitive rate is by comparing different lenders and their interest offerings. However, to ensure the overall cost of borrowing is manageable, individuals should also check the additional rates and charges. The key is to select a financial institution that extends loans at competitive rates and reasonable charges.
Usually, leading financial institutions also provide pre-approved offers to customers that simplify the repayment process. Such offers are available on several financial products, including home loans and loans against property. Check your pre-approved offer online in three seconds with just your name and contact number.
Besides these, individuals can further enhance their chances of securing a lowest home loan interest rate by maintaining a stable income source. Likewise, existing borrowers can also lower their loan burden by negotiating with their lender.
They may also consider a home loan balance transfer to reduce their existing loan interest.
