How To Differentiate Between A Good And A Bad Home Loan?
A Good and a bad home loan is all about convenient and affordable EMIs. Borrowers want to repay the loan without any financial or mental stress. They want to maintain a high credit score, accumulate good savings and repay their EMIs without the monthly hassle. If they are in a position to repay the loan sooner, they want a housing finance company that supports it. So, here are a few hallmarks that separate good and bad housing loans. Use them to distinguish the loans strategically.
Productive home loan eligibility:
When the banks and housing loan companies include credit score, finances and professional standing in the home loan eligibility criteria, they do it for a reason. Agreeably, a stringent housing loan eligibility criteria cannot be appreciated. However, even borrowers must be qualified to repay the house loan that they borrow. If a borrower decides to opt for a home loan that he cannot afford to repay comfortably, then he will be in a long term fiscal challenge. The only way to get out of such circumstances is to sell the house or default the loan. None of these situationswould have occurred if you had opted for a loan that you can repay steadily and effectively. So, the EMIs, interest rates, type of interest rates, borrower’s income and current assets, all play a vital role.
Dependable home loan package:
You can find the best home loan in India, with the lowest interest rates and the most affordable EMIs. Though this can turn into a bad house loan for you if you did not pay attention to the other factors of the loan, which are equally vital. When you are about to enter in a legally binding long term financial contract, you vet it out. You consider all the possible aspects to differentiate a perfect housing loan offer from a bad one. Consider the following criteria and calculate if it suits your personal long term financial plans:
• Loan tenure
• Fees and charges
• Terms and conditions
• Type of interest rates
Doable long term repayment plan:
Though it is one of the factors affecting home loans in India, it is the most vital one in the long run. You cannot anticipate all your financial variables for the next 30 years. So, you need to work with the branch manager who understands that and helps you along the way. A good home loan has a right repayment option, which can be changed as per the financial conditions of the borrower. A housing finance company should be flexible enough to consider restructuring of the loan, when a borrower needs to. There should be enough room for the borrower to make the prepayments comfortably and profitably.
If you examine the home loan offer along with the terms and conditions document carefully, you can distinguish a suitable choice for your personal finances easily and confidently.
