By Niyati Mavinkurve
It has never been a better time to be a homeowner in India. With banks easing the process for an individual to take on a home loan, it has now become easy for a young Indian to take a home loan and fulfil his dreams of owning a house. Whether it is a metropolitan city or a smaller town, the robust growth in home loans is fuelling a generation of young Indians to take their future in their hands and become homeowners.
Most of this can be attributed to the digital revolution. With everything now coming online, it takes a matter of a few clicks for an individual to check out the different rates of interest for a home loan and check out the EMI per month using a home loan EMI calculator. Each bank has their own web pages for home loans and their own home loan EMI calculators. By checking out these details in advance, anyone dreaming of buying a home can get their documents in order and make an application to take a home loan.
Take the case of a new homeowner, Ajay. He is 28 years old, newly married, and has a job in a reputed company. He availed a home loan after exhaustive research using an aggregator website. The aggregator website helped him to compare the interest rates that different banks were offering and with that information, he calculated his monthly instalment amount. He finally ended up picking a bank whose EMI was comfortable for him to afford every month. With that loan, he was able to execute his purchase documents and shift into his new home at record speed.
Benefits of home loans:
1. Affordable interest rates:
Home loans are one of the most affordable loans in the market today. Most banks offer home loans at rates between 8.5% to 10%. These loan rates are affordable and once the home loan rate is locked in, it stays constant unless the home loan rates are revised by the bank. As compared to a personal loan, or a business loan, a home loan is the cheapest with the least processes involved.
A home loan is a secured loan, which means the property papers are with the bank. In case of default, the bank is eligible to dispose of the property to recover the dues. Even though most home loan applicants do not default on their loans, this security means the banks can keep the home loan rates low.
2. Reasonable EMIs:
Banks offer reasonable EMIs based on the paying capacity of the borrower. Most banks have loan officers who mutually arrive at an EMI amount which is comfortable for the borrower to service his loan. Because banks consider the finances of the borrower while framing the EMI, the home loan EMI becomes affordable and reasonable. This provides a degree of flexibility to the borrower to manage their finances, expenses, and incomes.
3. Low to no pre-payment charges:
Most banks these days don’t have pre-payment charges for any pre-payments made. If they do charge pre-payment fees, these are very low. This makes it better for applicants to pre-pay small portions of their loan when they can afford to. Pre-payment works to help the bank recover their loan faster and for the borrower to reduce instalments from his loan.
4. Flexible tenures:
It is possible for the bank and the borrower to have a completely customized loan agreement with a tenure that the borrower can service. It is possible to get a loan for a tenure which works out better for the borrower. Banks are open to such agreements.
5. Option to shift to a different bank:
One advantage of home loans is that it is possible to shift the loan to another bank in case of rate differential advantages. In case another bank is offering better terms on the home loan, the loan can be shifted. This helps the borrower to save on interest.
6. Easy and convenient process:
The application procedure for a home loan is convenient and hassle-free. The time between application and disbursement has been cut down, and it is possible to get the loan application approved even in 5 days and loan amount disbursed in 2 weeks. This makes it easy to finalize purchase agreements and buy the property.
A home loan has empowered many young Indians to become homeowners at young ages. So, what are you waiting for? Do you want to become a homeowner? Apply for a home loan now.
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