A home is an aspiration for individuals and families. It is much more than a brick-and-mortar setup that has four walls and a roof. Owning a home is an achievement and offers social status and recognition to individuals. A home is a priceless emotion, but it comes with a hefty price tag. It is not easy to buy a home without a smooth financial flow or support. That is when a home loan seems to be the right financing option. A home loan is a perfect solution to finance your home within a few days. It is a secured form of a loan with a high rate of interest and charges. There are various banks and non-banking financial institutions that offer a home loan to a borrower with good eligibility criteria. However, the eligibility criteria for getting approval are high and down payment is a must. Home owners need to arrange for the down payment, as that will not be included in a home loan. Before you get involved in borrowing, you must know every small detail about a home loan and how it works.
What is a home loan?
A home loan is a specific loan that is used for purchasing a home. It is a lump sum amount that is sanctioned by a financial institution to the homeowner for meeting the home loan eligibility criteria. A home loan includes a huge sum of money and the eligibility criteria for approval is very high. An excellent credit score, impressive income, good property, down payment, and credit records are important aspects. The repayment scheme is monthly installments, and one needs to choose the right tenure for a suitable EMI. A home loan is a long-term commitment that takes a good part of your income for more than 15 years. It is a secured form of loan because a loan provider can recover the amount if the borrower defaults on the loan.
Home loan documents
If you are planning to take a home loan, you need to arrange all the documents. Documentation is important to process the loan application, so here are a few of the documents that you need to arrange.
- Employer Identity Card
- PAN/Passport/Driver’s License/Voter ID card
- Permission for construction
- Occupancy Certificate
- Payment Receipts or bank A/C statements showing all the payments made to the Builder/Seller
- A recent copy of Telephone Bill/Electricity Bill/Water Bill/
- Last 6 months Bank Account Statements for all bank accounts held by the applicant/s
- If any previous loans from other banks/lenders, then loan A/C statement for the last 1 year
- Salary Slip or Salary Certificate of the last 3 months
- Business address proof
- IT returns for the last 3 years.
- Balance Sheet & Profit & Loss A/c for the last 3 years
Why go for a home loan?
No collateral: A home loan is a secured loan as a loan provider can recover the defaulted amount from the property itself. There is no need for any collateral attachment at the time of application.
Easy disbursement: The loan industry is developing, and non-banking financial institutions are now working in a better way. The disbursement is really quick and the chances of approval are high and better than with traditional banks.
Lump-sum amount: A home is a hefty expense. A home loan helps the homeowner with almost 90% of the property amount. It is a great help that can help your dream come true.
Easy repayment: A huge home loan is broken down into monthly installments in the form of EMI. Paying the EMI every month is not a big burden. This has encouraged many dreamers to come forward and opt for a home loan and leave the rented shelters.
Eligibility criteria for home loans
Are you planning to get a home loan? If yes, you need to start working on the home loan eligibility criteria really early. An excellent credit score above 750 and an impressive income will be very important in getting approval. A good property is a good convincing factor because a loan provider can recover in the case of default. A high income is important because the home loan EMI will be really high. An individual with a good income can manage EMI along with other fixed obligations and expenses. Aim for a good credit score with regular payments, healthy credit behavior, and no defaults.
Where to apply for a home loan?
A home loan is a prevalent type of loan that every homeowner experiences. It makes the purchase easy with a one-time lump sum disbursement. There are offline and online financial institutions like banks and non-banking financial institutions that can offer a hassle-free borrowing experience. If you need digital borrowing experience, you should go to an online loan provider like Clix Capital. The rate of interest is high, documentation is minimal, and approval is quick. The chances of getting an unsecured home loan have become really easy with a non-banking financial institution like Clix Capital. Click and apply to make your dream of owning a home come true!
Wrapping up
A home loan is a great financing option that helps an aspiring individual to get his own home. However, it is a long-term burden and should be taken after considering the repayment capacity. Opt for a low home loan interest rate by comparing the products and financial institutions. Keep a home loan calculator to get the best home loan deal!
Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius