Mr. Aniket Munda who used to work for a private company in Jamshedpur had been craving long to purchase a home. However, a shortage of funds kept him out of the contention for it as his income and savings were not enough to fund the same. Also, he was unaware of the Things to Follow While Borrowing a Home Loan.
He had been hearing a lot about a Home Loan for private employees facility from his friends and colleagues that it can provide funds between INR 20.00 Lakhs to INR 10.00 Crores. He made up his mind to grab it and fulfill his dream of buying an abode with the help of a housing loan.
However, before he could apply for a housing loan, he wanted to consider all aspects that will give him confidence while approaching a lender and getting approval. If you are one of the probable Home Loan borrowers such as Aniket, following are the 4 Things to Follow While Borrowing a Home Loan that you must consider.
4 Things to Follow While Borrowing a Home Loan:
1. CIBIL Score:
Lenders would pull out your CIBIL or Credit Score once you submit your Home Loan application. The Credit Score proves your creditworthiness whether you have been responsible while repaying your existing and older credits or payments. If they don’t find the CIBIL Score healthy and in the range of 700 or more, you won’t get approval. But you can improve your Credit Score by paying all your loan EMIs, credit card outstanding on time and by maintaining a clean payment record throughout. You should also check your Credit Score and check for errors so that you can resolve it before applying for a Home Loan for private employees. One of the biggest benefits of having a storing Credit Score is that you also get lower Home Loan interest rates, making it affordable to manage.
2. Existing Financial Liabilities:
If you have many ongoing loans and EMIs on your head, it would be good to settle all dues before approaching a lender for a Home Loan. It is vital to do because if you don’t do it, lenders may reject your request seeing that you are already servicing many loans and you won’t able to handle one more. What’s more, applying for a Home Loan without clearing previous dues also shows that you are not a responsible credit manager. It’s because you have been devoting a larger portion of your income towards debts which is a risky practice.
If you are young and have many working years left, not only will you get quick approval but even get a longer desired tenor to spread your payment and never feel stressed. A person nearing his/her retirement won’t get a longer loan tenor and even his approval for the loan may not come as lenders assume they may default on payments.
4. Apply Only for an Amount that You can Repay
Be informed to know that a Home Loan is something that you will need to repay, and it will affect your income for a long time as Home Loans run for years. Thus, if you want your monthly income to go awry or want a Home Loan approval, ensure to apply for an amount that suits your income. Applying for a larger amount that desired or that does not meet your income may see a loan being rejected. For this, you can use the Home Loan eligibility calculator available at a lender’s website for figuring out your affordability.
Check your EMI: Home Loan Calculator
You are now in a better position if you are all set to apply for a Home Loan as you can work on any missing points as discussed. Home Loan for private employees and others are available online for which you can apply on the go, and get speedy approval.