Recently the Reserve Bank of India (RBI) has increased the repo rate by 50 basis points to 5.90 per cent. It is the fourth time since May 2022 that the repo rates have been revised. Home loan interest rates will go up as every time there is a rise in the repo rate, the funding gets costlier for banks and other financial institutions.
However, this is when the borrowers can take a wise call and do certain due diligence to get the best deal during this festive season. Many banks are now offering discounts and offers on their home loan products. Certain borrowers with an existing relationship with banks are also being offered pre-approved loans. So, if you are scouting for better deals, this could be the right time to take a decision. Here is what you can do.
Read More: Plan To Buy A House This Festive Season? 10 Banks Offering The Lowest Home Loan Rates
Check Your Loan Eligibility
Firstly, you should prepare a budget to purchase a house. After budgeting, you can keep aside the money for the down payment and then see how much loan you need to borrow from the banks or other financial institutions, depending on your requirements and eligibility.
Your Credit Score
After budgeting, you must check your credit score as that will decide whether you can avail the amount you need. If your credit score is above 700, you must not have any problem getting a loan. If the score is less than 700, it is time you focus on improving it.
Prepare Documents
Once your credit score and loan eligibility are checked, you must make a list of documents you need to apply for the loan. You can either call the bank or check their websites to know what documents you need. Applying for a home loan is easy. You can either apply online or by visiting the nearby bank branch. These days bank officials can also visit your home to explain the procedure.
Read More: 7th Pay Commission: Dearness Allowance for Delhi government employees hiked by 4% ahead of Diwali
Compare the Interest Rates
Now is the time to compare the interest rates. Check all the banks and their offerings for borrowers like you. Compare the interest rates and see which bank or financial institution offers the best deal. You can take a call after reading the terms and conditions of the loan.
Apply For the Loan
After you have shortlisted the banks, you can then think of applying for a home loan. Though it is advisable to apply with the bank you have an existing relationship with, it is not mandatory, and you can apply wherever you think you are getting a good deal.
Loan Disbursement
Once your loan application is approved, the bank will communicate it with you and ask you to visit the bank to sign the loan agreement. You can visit the bank with all relevant original documents and read the loan agreement carefully. Check your details, property details and amount carefully. Also, see the interest rate you are being charged. Once you are convinced of the correct details, you can sign the document. Bank will notify you of the date of disbursement.
Property Registry
After the loan disbursement and possession, you can complete the loan registration process by paying stamp duty and registration fee. Bank will keep the original registry paper till you fully repay the loan. Paying your EMIs on time without frequent delays and avoiding defaulting on your loan is advisable. Banks can auction the property and recover the outstanding dues if you fail to repay your home loan. Once you have fully repaid your loan, you can go to the bank and get your original property papers back.
It is essential to know that interest rates are negotiable, so you can use this opportunity if your credit score is on the higher side and your credit history is clean. The table below compares the lowest interest rates on home loans. You can check the banks and HFCs, their interest rates and EMIs on the loan amount of Rs 50 lakh for a 20-year tenure.
Top 20 Banks and HFCs With Lowest Interest Rates on Home Loan
