How to make the right choice for home loan?

Feb 24, 2018 by

Even today, a majority of the Indian population doesn’t own a house. They live in rented flats and pay a hefty amount to their landlords because of the increasing property rates. Stop filling the pockets of your landlord and start saving to buy your own dream house. Follow this process to apply for home loan from banks or housing finance companies :

  • Fix a budget

Set the amount you are ready to invest for your house! Setting a budget allows you to save your time while looking for the house. With a fixed budget, you will only be considering the houses you can afford. Fixing an amount to put into your home keeps you out of debt and help you track your progress for this long-term investment.

  • Check your bank credit score and the eligibility of loaning company

Your budget is just an amount you are ready to invest in your house, however you might not have the total money. Banks and other housing finance companies help you make a good deal for your house. You should check your bank credit score to apply for loan in your bank or other housing finance companies. Apart from the credit score, you must consider the eligibility criteria and the needed documents of the each company. A higher interest rate will be charged from the applicants who have low credit score or poor bank history.


  • Compare the interest rate of all the companies

With a list in your hand that matches your eligibility and credit score, compare the Rate of Interest (ROI) of those banks and companies. All the banks and housing finance companies provide the information online on their websites for the ease of the customers. Check whether the interest will be fixed or fluctuating. With a fixed ROI, you will be paying the same interest rate for the tenure of your loan but fluctuating ROI changes with the new amendments following the years.


Tip : Fluctuating ROI works best for home loans!

  • Calculate the EMI

Considering the ROI of the companies, calculate the Equated Monthly Installment (EMI) you will be paying to them. Use the home loan EMI calculator online to calculate the EMI specifically for housing loan from the financial institution.

  • Finalise two out of the lot

After thoroughly calculating the EMI and comparing it with the amount you will be able to pay each month, shortlist two out of them. The two shortlisted companies will match the eligibility criteria, your needed documents and the ROI, you will be paying.


After finalising the two best options, the applicant must consult the banks or housing finance companies personally to clear their queries about the home loan and fulfil his dream of owning a house.

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