Planning for Home Loan

Banks and lending company has reduced its interest rate and simplified home loan process. Low interest rate and competitive scheme has made home loan easy reach of common man . If you are first time buyer or planning for home loan, here are guidelines for you to plan your home loan.

Know your lender: Before you choose or sign for a home loan, know your lender. Make good market research on rate of interest, processing fee, penalties and charge for pre-closure. Choose the lender who offers best deal that suits your need and requirement.

Hidden Charges: Hidden charges are not really hidden but borrowers may fail to note or ask lender before signing or applying for loan. For home loan, borrowers need to pay down payment which may be about 20 to 25 percent of property price. In addition to the down payment, borrower will have to pay processing fee and other expense on sanction of home loan. Be prepared to pay some extra other than these charges.

Credit history: Credit history is history of your past borrowings and repaying behaviors. These factors help lenders determine whether to extend credit, and on what terms.

Income Proof: When applying for loans or advance, you will have to show your income source. It can be either from your business, salary or other source. For income proof, you need to provide bank statement for last six month and two years financial if self employed.

Know your insurance company: When you are buying a home or applying for home loan, you need to insure your property and home loan. In case you loss your job or met with accident or in case of death, insurance company will help your family to payoff outstanding loan without causing burden of loan or interest.

Your lender or lending company may not be best person to ask for advice. Make good market research and discuss with your accountant or financial adviser. Contact as a many lender as possible before choosing one for loan or advance. Choose the home loan that best suits your need.

Caution against unincorporated Lenders

Lending and borrowing is common in today’s world. There are number of banks and financial institutes come up with new scheme or offer to attract borrowers or customers. RBI cautioned public to verify the credentials before dealing with unincorporated lenders.

RBI caution public to verify the credential of bank or institutes before approaching for personal loan or paying processing fee for them. It is recommended to deal with bank or institutes who have years of experience in lending loans and advances such as personal loan, car loan and other long term loans.

The central bank said it noticed that certain entities are issuing a spate of advertisements in newspapers offering personal loans, loans against property and other loans, at a very low rate of interest. In the advertisements, these entities indicated their mobile phone numbers for the prospective borrowers to correspond, the bank added.

It has also come to the notice that some of these entities are cheating the public by charging processing fees upfront and disappearing thereafter. Reserve bank cautioned public before dealing with unincorporated lenders. Borrowers are advised to exercise utmost caution and verify the credentials while dealing with them.

Reference

RBI cautions public against unincorporated loan providers

Guidelines for Easy bank loan

Bank and financial institutes play vital role in helping you or customers to meet their immediate requirement and overcome financial debts. Good planning and market research helps you to get bank loans easily and payoff the debts without any burden or increasing your monthly expense. Here are some tips for you to get easy bank loan.

Tips for Easy bank loan

Right lender for your loan: It is important to get a right lender who offers special or attractive offers exclusively for you. First and important thing for bank loan is right lender. You must contact two or more lender before you choose right lender. It is important to take some time and be a little selective, when loan is for home loan or loan for long duration.

• Scheme: Some banks or financial institutes follow fixed interest rate or fluctuating interest rate. In some schemes, the rate is fixed, but only up to certain duration and subject to some terms and conditions. Therefore it is important to check the track record of interest rate and check the scheme for processing fee, penalty, late fee etc.

• Budget: In some case, interest rate may fall or be lower than interest rate when borrowing loan. In other case, borrowers will have to pay higher interest rate based on market condition and terms and condition of bank or lending company. Borrowers must have budget to afford higher interest rate or other expense relating to loan.

Take some time and make good market research to find the loan affordable by you and the lender who helps you to clear your debts easily. Right scheme and right lender plays vital role in getting loan easy and make prompt payment.