Having your own house gives you financial security and peace of mind, there are no two ways to it. Besides, if you are already living in a rented apartment/house, it makes sense to pay loan EMIs instead of the monthly rent, as in that case you will actually own your own house 20-25 years down the road.
When borrowing an axis bank home loan, SBI home loan, etc. it’s important to learn about the various aspects of the same. This is because these small things can actually help you save a lot of money and time. These are:
It’s surprising that so many bank executives don’t think it’s important to tell the loan borrowers about the type of interest rate they are getting. Of course, it doesn’t help that most borrowers are mainly concerned about getting the lowest interest rate possible and not its nature.
While it’s true that you should try to the best interest rate possible (unless you can only apply for loans for bad credit), you should also find out whether it’s a floating rate or a fixed rate:
Fixed Rate: As the name suggests, this interest rate remains fixed throughout the tenure and is not affected by the market conditions.
Floating Rate: This type of interest can change with the market conditions. So, at times you may have to pay a higher rate, but other times you may get to pay a lower rate.
Overall, if you want a safer and predictable repayment, then a fixed rate is for you. However, if you have an appetite for risk, then you can take your chances and go with a floating rate instead.
In most cases, when you get a home loan, there are some additional charges attached to it. For instance, there is a processing fee, service charges, transfer fee, etc. which vary from one bank to another.
You would think that after paying the EMIs of axis bank home loan for years, if you happen to receive a considerable amount of money from a family member in inheritance, or sell your car for a good price, and decide to pay off your pending loan amount in one go, you would be able to do so without a problem, right? However, that may not be true.
These days, many banks charge a prepayment fine for situations like that. So, you may get to close the loan account by paying the balance but you have to pay an additional cost.
If you are applying for a home loan, be sure to inquire about the prepayment charges as well.
So, these were some of the most important things to learn about the home loans. Moving along, as a home borrower you have some rights too, which are:
If you are not applying for loans for bad credit, then you have the right to negotiate over the interest rate with the lender. In fact, in a large number of cases, people are able to get an attractive interest rate quite easily.
Your chances of getting a better rate are much higher if you are an old customer of the bank and have always paid your credit card bills and loan EMIs on time.
Finance - savvy people know the importance of reading the fine print before signing the documents for a loan. This is because you must know what are you signing up for.
Reading the terms and conditions of a loan allows you to identify the hidden costs (if there are any), the nature of the loan interest (floating or fixed), and many other important details. Thus, it’s strongly recommended that you check the same when you apply for a loan.
If a dispute arises with your bank, then you can contact their grievance cell for the same. However, if you are not satisfied with their response, then you can take it up with the Banking Ombudsman in your area.
Banking Ombudsman is a senior official appointed by the central bank of India. They act as a quasi-judicial authority to resolve disputes resulting between banks and their customers.