Know The Best Way To Avail Lowest Home Loan Interest Rate In India?

2022 is one of the best times to apply for a home loan for multiple reasons. First, the home loan interest rates in India are at their multi-year lows. Second, lenders have eased the norms and formalities of home loan applications. You can conveniently apply for a loan online and get the funds in your bank account. However, despite home loan rates hovering around multi-year lows, not many borrowers get the lowest rates. This article discusses the top factors determining home loan rates in India and ways to get the lowest rates.

Which Factors Determine Home Loan Interest Rates in India?

The top factors affecting home loan rates in India are the following:

• The Borrower’s Credit Score – The credit score is a three-digit figure issued by credit bureaus like CIBIl, Equifax, Experian, etc. The number usually ranges between 300 and 900. 
• The Borrower’s Monthly Income – This means your net monthly income after factoring in all deductions. 
• The Borrower’s Age – The borrowers age must be above 21 at the time of loan application and under 65 on the final EMI payment date.
• Property Location – The property must be located within the geographical boundary and territorial control of India.

Let us now discuss how can you get the lowest rates on the best home loan in India.

Foolproof Tips to Get The Lowest Home Loan Rates in India

1. Keep Your Credit Profile Strong

Credit bureaus like TransUnion CIBIL compile the credit score and prepare the credit report in India. The credit score band is usually 300 to 900, with 750 being the benchmark. So, a credit score above 750 is considered a high score, and such a score increases your possibility to get the best rates.

A high credit score speaks volumes about your credit profile. If your credit score is high, lenders understand that you are serious about loan repayments. Hence, they won’t mind offering you deep discounts on the interest rate.

2. The Monthly Income Must be Above The Threshold

Lenders generally declare a minimum income level, known as the threshold, while accepting loan applications. The threshold is usually above INR 20,000 a month. If your monthly income is higher than the threshold, your chances of getting the best home loan in India increase.

If your income is not as expected by the lender, you may combine the income from all sources, including fixed deposits, stocks, mutual funds, insurance plans, etc., to compute your monthly income figure. Including all income sources in your net income will boost the figure and simplify loan approval.

3. Apply When Young

As already mentioned, any Indian citizen above 21 can apply for the best home loan in India. But, the closer you are towards the maximum age of 65, the higher the home loan rates in India will be. The repayment term of a home loan is usually thirty years. When you apply while young, you can avail of a full-term loan. An extended-term reduces the loan EMI, making it more convenient to repay. However, when you are near the maximum age, you cannot apply for a full-term loan, which will increase the EMI amount, and lenders may increase the interest rate to reduce their credit risks.

Hence, applying for a home loan early in life can be a wise decision to avail of the lowest home loan rates in India.

4. Property Location

Home loan is collateral-based, and lenders prefer properties with a high resale value. You can negotiate the rates in your favour if the property is located in a prime neighbourhood with modern-era connectivity and amenities. In contrast, if the property is in a remote place, the lender may increase the rate to reduce their credit risks.

So, evaluating the property location is crucial before requesting the best home loan in India with the lowest rates.

Conclusion

The best home loan in India is only a click away when you have a robust credit profile and monthly income. Moreover, being young also plays a vital role in reducing the home loan rates in India. Browse the lender’s terms and negotiate the rates before applying for a home loan.