A man’s basic necessities, as we all know consist of food, clothing and shelter. Shelter being one of the main requirements, a home is what every independent individual looks up to. However, in this highly competitive and commercially driven world, the resources needed to buy a home are quite high. This aspect gave rise to the very famous concept of a home-loan. Today, there are a number of best home loan offers available.
What is a home loan?
A Home loan is a loan product where the lender provides funds for the purchase or construction of a house/ residential property. The home loan may be availed either for buying a new house or resale of an existing residential house. One can also benefit from a housing loan product, for the purpose of buying a plot of land and carrying out construction on the same. This kind of loan is called a composite loan.
Indian housing loans
Indian home loans are provided up to a maximum of 80%, in some cases 90%, if the loan amount is below 20 lakhs. Most lenders get the property valued independently and provide house loans based on the value instead of the cost given in the purchase agreement. This is in the case of home-loan for resale flats. Home loans are repaid through monthly installments (EMI) spread over up to 20 years. Some banks provide housing loans even for a tenure extending up to 25 – 30 years. However, the maximum tenure of any loan and home loan is restricted by the age of the borrower to the end of the tenure. This is done to make sure that the borrower can repay the loan fully by or before the retirement age.
Home loan interest rates
The types of home loans can be classified into two categories depending upon the interest rates. Mainly, there are two types of interest rates.
A fixed interest rate means that you will have to pay same EMI over a period of time (it may be fixed for entire tenure or it may be reset at fixed interval). Very few lenders in India offer fixed rates where the rate of interest remains constant for the entire tenure of the home loan. Most lenders reset the clause every 3-5 years.
Floating interest rate
Floating interest rates may change at any given point of time, which may result increase or decrease in either your home loan EMI or your tenure. Before making any decision, a borrower must consider the best home loan offers at the time.
Home Loan EMI Calculator
Do you plan to buy a home any soon? Are you confused about how much EMI you owe the lender every month? We have the perfect EMI Calculator for your home loans that will help you calculate the EMI for you to service the loan. This EMI is to be paid to the lender every month towards the repayment of your home loans. It will depend upon the interest rates that the bank charges, for the loan given to you, along with the tenure and the amount. You can also experiment with this calculator to find out how you can reduce the EMI or the tenure of the loan. This Calculator will help you take advantage of the best home loan offers, by giving you a clear picture of your EMI payments.