Once you sign the loan contract with the lender you have agreed to pay back the interest amount in addition to the principal amount that you have borrowed within the stipulated period. If are not being able to make the repayment, it may cause you a lot of trouble including penalty charges or the late fee for paying late, sinking further into debt as you tend to borrow more money to pay these loans and many more.
There are various types of loan available which are being offered by various organization, for instance, education loan, home loan, personal loan and many more. Further, a home loan can be categorized into various types such as home purchase loans, home improvement loans, home construction loans, land purchase loans, joint home loans, home loan balance transfers, and top-up home loans. Well! availing a loan is a serious commitment. Here are some points for you that you must consider before taking a home loan
- Do you really need a home loan?
It is very important to analyze your requirements before taking a loan. Before you sign into a home loan do look into the other options which can at least minimize your principal loan amount. There is a various government-subsidized home loan available nowadays which can considerably reduce the interest amount of the loan. Do talk to a financial adviser before signing a deal.
- Know your lender
You must know what kind of lender is best for you. There are various organizations available in the market that is ready to give you a home loan. Some of them are reputed and some are to be avoided at all cost. Policies and interest rates id different for a different organization. Make sure that you choose the best and genuine one. Be aware of all the policy-related information before choosing any lenders for your home loan.
- Know about the type of interest
Based on the types of interest, home loans can be categorized into two types, i.e., fixed interest and floating interest. The type of interest which does not vary according to the market fluctuations is known as fixed interest home loan. Whereas, the type of interest which changes with the market fluctuation is known as floating interest. The policies related to both of these types of loan varies from bank to bank.
- Read the contract papers before signing into a home loan
Well! we know it’s boring. Yes, we know that reading long contact documents isn’t exactly fun but not reading contact documents before committing to a serious deal is a bad sign. Check out the credentials of your lenders before signing any contract. Trust me, this is very important.
- Avoid long tenure
Try to avoid long tenure of loan repayment. Yes, longer tenure can definitely give you short-term relief by reducing your monthly EMI. However, you will end up paying way more interest for a long tenure. Please subscribe to our page to know more about various types of loans.