InvestorQ : How do I choose a lender for my home loan?
Pratik vyas made post

How do I choose a lender for my home loan?

Manisha Mehta answered.
3 years ago

There’s so much you have think and decide about when buying a new home. Area, builder, locality, which floor, how to do the interiors, etc. But the more hard-hitting questions are whether to take a loan for a home? If so, how much? Which lender to choose from etc.

So, let’s see if the following points help you decide among the many lenders that are in the large lending market:

- You do not have to take a loan from the same bank where you have you savings bank account. There are numerous reputed players in the market right now and you can go and consult various banks or NBFCs to get an idea of how much of a loan you can get, your eligibility criteria, etc

- Research on the interest rates these banks or NBFCs are offering you. This is the deal maker or breaker, after all.

- Short list the financial institutions that offer the best lending rates and try and negotiate for a better deal.

- Understand all the additional charges that come along with every lender. This, too, could impact where you get your loan from as you would want to minimise any penalty charges that could be levied.

- Understand the various down payment requirements all the lenders have so that you can choose between one you are most comfortable with.

- How responsive a bank is to the policy changes by Reserve Bank of India is critical for you, especially if you opt for a floating loan rate. For instance, if a lender is usually seen reducing rates in response to a cut in repo rate by the RBI, then one should opt for that lender. This is because with such a lender, you can expect a fair deal from that lender not only now but in the future as well.

- Pre-payment penalty is a penalty few banks and NBFCs charge to their customer if they try to pay off their loans before its tenure. Thus, you might want to choose between a bank that doesn’t charge you any pre-payment penalty vis-à-vis a bank that does. After all everyone wants to get done with their debt as soon as possible, right?

Hope these pointers help you in your search for a good home loan lender.