As we all know that the Indian real estate industry is booming day by day and I am sure all of us want to own a house. There is a lot of financial assistance provided by the government organizations in the name of “housing loan” which makes this dream come true. The loan amount endorsement depends on a host of factors. In spite of different interest rates provided by different banks there are still people who wanted to take a risk and buy their dream house at any cost.
So what is the trick here to know which bank offers the best interest rate, repayment terms, EMI options etc. If you have a dream to buy a house and want to go for a housing loan, then hold on here and read further to know what are the important terms and conditions you should know before plunging into bank loans.
These are the basic terms which you should be aware; they are pre-payment frequency, limit, Levy of penal interest, fixed and floating interest rates, EMI calculation etc.
Pre-Payment Frequency : All the banks will offer a pre-payment frequency which is nothing but a clause to understand on what term basis you’re going to re-pay the interest and the principle amount eg: anytime, once a month/quarter/6months/year etc. Compare these terms with those of other banks and decide the quarter which will suit you better.
Limit: banks will specify the limit for the amount withdrawal based on several criteria’s like your monthly income, repayable capacity, proof of identity etc. Based on this you can pick your amount limit eg: minimum amount defined and max amount defined.
Levy of penal interest: you have to pay more than what you’re entitled to. At times people might have to pay a higher rate of interest due to various reasons and situations. To avoid all that it is advisable to repay the amount on a continuous basis.
I am sure now all of you are very curious to know about the different terms and conditions used in banks while applying for a home loan. I have more to share with you so now take a break will catch up with the same topic in the next post.