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6 Things You Must Consider If You Are A New Home Loan Borrower

Chapter #11 of Digital Loan Series by WhatsLoan

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There are multiple parameters for you to select your lender. You can either go for a bank that is offering you the lowest interest rate, or you can opt-in for a lender that is offering you a longer loan tenure. However and whatever ends up your reason to select a particular lender, you must consider all the parameters beforehand.

In this Chapter 11, we are taking you through a short guide that includes 7 such points that you must consider if you are new home loan borrower.

1. Long Tenure, or a Short One?

We understand the excitement of owning a home and also the mortgage responsibility that keeps stressing you from time to time. We recommend that you plan your financial status in advance and opt-in for a long tenure home loan. In either case, you can pay your home loan earlier but this will keep you at lesser stress as compared to a short tenure.

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2. Overdraft or Standard Loan?

Few of the banks have introduced overdraft for home loans as well. In many cases, there are additional fees for using overdraft protection that reduce the amount available for overdraft protection, such as insufficient funds fees per check or withdrawal. You may be suggested that overdraft loan are similar to standard loan so you should go for it. But do you research properly. Both are not similar.

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3. Bank or NBFC?

Banks are more transparent than NBFC when it comes to listing down the MCLR rates. The RBI has mandated that MCLRs should be published on the website every month and as such the transparency is ensure to the borrower. However, the NBFC don’t have such guidelines and they fluctuate based on market conditions.

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4. Stabilized MCLR rates

Choose a bank that has not fluctuated its MCLR rates considerably in last few months. The banks that changes the MCLR rates very often and you end up clueless on the margins that may cost you more or less with the same fixed amount of sanctioned home loans.

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5. Reset Period?

If you have opted for a flexible rate of interest in the home loan, then the bank offering you a longer reset period is good for you. With the market scenario and the increasing rate of interest, it is good if you can find an annual reset period.

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6. Low Ticket Loan or A High Ticket Loan?

Many are not aware about this but if you opt-in for a higher ticket loan >25 Lakhs, the banks offer you 18 months of reset period. Good time to fluctuate the interest rate.

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Digital Loan Series

By the way, do you know that we have built a Digital Loan Key, a unique financial identifier, that can retrieve your legacy documents (such as your Aadhaar card, pan card, bureau score, 10th mark sheets, birth certificate) online and enables you to get it verified within minutes and share with the lenders in one click.

The mission of this Digital Loan Series is to educate you and make you ready for the loan anytime!

If you happen to read this article, we assume you are somewhere in between of thinking for borrowing/purchasing a house. We recommend you to follow the series, or if you have any immediate query, reach out to us at social@whatsloan.com.

We also recommend you to share this with your people, your network, and younger ones so that they can be loan ready for the right time!