How To Prioritize The Requirements for Ideal Home Loan Interest Rates In India?

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    Sep 10, 2014
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How To Prioritize The Requirements for Ideal Home Loan Interest Rates In India? Photo by Aishwarya Mahurkar

Why do we need to prioritize the requirements for home loan rates? Any home loan package is a multi-faceted product with several key components. You can never know which one will be crucial in long run. Will you need zero prepayment of floating home loan interest rates? Or will it be stability of hybrid interest rates that will serve your family better? So, as a multi-faceted product, prioritization is a definitely a challenge. So, here is a step-by-step plan for it.

Step# 1: Know thy self

It is a cliché but considerably applicable to today’s financial situation. You cannot undertake any financial decision effectively without understanding your finances for today and tomorrow. Home loan interest rates in India  affect your EMIs and monthly cash flow, so take a stock of your current assets, liabilities, earnings and expenses. Make a smart judgement about the expected expenses, which will allow you to figuratively estimate the percent of your monthly income that you can set aside for home loan EMIs. 

Step# 2: Reverse-engineer home loan rates

Home loan interest rates can be calculated with home loan EMI calculators. But, a bigger practical challenge is that it is hard to get idealistic and affordable housing loan interest rates in the current Indian economy. What you need is a roughly calculated range of EMIs that you can reasonably pay every month. This range must be reconsidered if you want to opt for a shorter home loan tenure. So, run multiple potential simulations where you have a decent understanding of what you can afford. This will help you to negotiate well with your potential lender and ask for home loan rates that you can actually afford; or and walk away if you do not get the offer that you can comfortably repay.

Step# 3:  Be smart about customizable options

The borrower’s housing loan approval process should never stop at home loan interest rates. You may get the best home loan rates . But, they won’t be helpful enough to navigate through the ups and downs of the home loan tenure; if you do not have an understanding of how to use the customization options to your advantage. Therefore, consider how you want to fine tune options like the following for your loan structure:

• Processing charges
• Type of home loan rates
• Prepayment charges

Of course, it does not have as much bearing on your EMIs as the housing loan interest rates. But, you can be rest assured that ignoring these details can be an uneconomical decision for you. So, think long term and invest your time in making smart decisions. It will serve you well indeed.

Author's Profile

The author is a seasonal writer on topics of finance and the home loan sector. Through her writing, she articulates aspects that are important to people availing best home loan rates facility such as Home loan interest rates in India, documents, eligibility criteria that help to make the best decision.

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