Finding an affordable housing loan with a delectable interest rate is a Herculean task. However, I have done all the leg work for you and brought you some of the most critical and essential aspects of buying the dream abode for yourself. Let us dive right in without wasting a single minute.
Having A House In India In 2024
House hunting is a huge deal. Several factors come into play when you are looking for a house, such as the locality, the acreage, etc. However, finding the right affordable house loan is a bigger challenge. A challenge that every new homeowner needs to overcome.
Different people look for different things when it comes to buying the right house. You might be looking to settle down. Or see it as an investment. Therefore, you need to carefully consider your reasoning before committing to the idea.
If you have already made up your mind and are looking for headway regarding the right affordable housing loan, I have got your back. Let us dive right in.
Markers For Choosing The Right Affordable Housing Loan
Buying a house is a huge change and a big life decision. Therefore, you need to prepare yourself mentally as well as financially. However, the current generation is not a believer in the idea of saving up money till their retirement to build a house. Instead, they want an easier solution.
This solution comes in the form of home loans. However, choosing the right housing loan is not a joke. It is a huge financial commitment that can last for years. As a result, you need to make the right decision for yourself.
Here are some of the basic considerations that you need to meet while choosing the right and affordable housing loan for your dream house.
Total EMI
The foremost thing that you need to know about housing loans is the overall EMI amount. This is the money that you will have to pay every month for at least 30 years. Hence, you must not take this detail lightly.
The usual process of repayment involves paying the EMI amount till the end of the period. An EMI is generally broken up into two primary components: the principal amount and the interest. Therefore, you need to understand this breakup carefully.
You have to remember that interest decreases over time. Hence, keep paying your debt to lower the initial interest rate.
Duration Of EMI
The following detail that you need to look at is the overall duration of the EMI. Every EMI comes with a specific time limit. This time limit decides what your overall EMI would be. Hence, you need to be very careful about this time limit.
Home loan companies will present you with options for the overall duration of the loan. Therefore, choose the one that sounds most convenient and affordable for you. Then again, do not choose the most extended duration because the EMI seems less. You are not just paying the principal, but you are also paying the interest.
Overall Interest
Every bank you approach will charge some amount of money as interest. This is true for every money lending service. Therefore, you have to prepare yourself to pay some extra cash as interest. Consequently, you need to look out for institutions with the lowest interest rates.
Banks or financial institutions calculate the overall interest rate over the principal amount. Therefore, you need to have a clear idea of the details, such as the percentage, principal, etc. Otherwise, you might not make an informed decision in the long run.
Down Payment Amount
One of the most significant aspects of housing loans is the down payment. Downpayment is the initial sum that you need to pay in order to get your loan approved. In my opinion, you should spend as much money as possible in the form of a downpayment. This will ease the brunt of monthly EMIs.
While you are on the hunt for affordable housing loans, you need to understand that there are companies that will lend you 100% of the principal amount you need to buy your own abode. However, I would suggest otherwise. It is always best to pay 30% of the overall amount up front.
Mortgage Insurance
One mistake that every new homeowner makes is not giving importance to mortgage insurance. I do not want that for my readers. A mortgage insurance or loan cover term insurance is an added shield that ensures no financial risk befalls your family.
In the event of an untimely death or financial problems, the mortgage insurance pays the remainder of the amount. This will clear your family of any debts that might be incurred due to the home loan. Hence, you need to purchase coverage while planning the mortgage.
Additional Fees
Buying a home is not an easy road to take. It is a meandering pass that has several hidden chasms and setbacks. Getting your loan approved is one of the most challenging tasks you can undertake. In fact, it is riddled with paperwork and red tape.
Each stage requires hidden costs. Hence, you need to keep an open mind and formulate your home-buying budget in a way that accommodates these hidden costs. Otherwise, you are subjecting yourself to pointless financial stress. Therefore, keep your budget flexible and see which company has the most minor hidden charges.
Best Companies For Affordable Housing Loan
India is essentially a developing nation. Hence, EMIs are rampant and common. In fact, most big investments in India are made in an EMI format. As a result, the market is saturated with lenders that are willing to provide affordable housing loan options.
However, not every lender provides the same benefits or demonstrates similar benefits and drawbacks. Therefore, you need to have a clear idea about the factors that set these lenders apart from each other.
Here is a small list of some of the best lenders who offer affordable housing loan options to the masses. However, this is not a ranking list. Hence, approach the list however you like.
HDFC Housing Finance
| Loan amount | 90% of the property value |
| Tenure | 30 years |
| Rate Of Interest | 8.70% to 9.30% |
| Processing Fee | Rs. 3000 |
| Foreclosure Charge | Nil |
| Penal Interest Rate | 2% |
HDFC Housing Finance is one of the leading housing finance companies in India at the moment. HDFC Housing Finance is a subsidiary of HDFC Ltd. The company caters to a whopping 7.9 million homeowners with their affordable housing loan options.
As per the latest reports, the company has lent out around 5.4 trillion Indian Rupees since 1977 as housing loans. The company operates in Europe, Asia, and Africa. Therefore, it is a reliable brand for the customers.
LIC Housing Finance
| Loan amount | Upto 15 Crores |
| Tenure | 30 years (salaried), 20 years (self-employed) |
| Rate Of Interest | 8.35% to 10.50% |
| Processing Fee | 0.50% of the principal amount |
| Foreclosure Charge | No information |
| Penal Interest Rate | No information |
LIC Housing Finance is one of the most established housing finance companies in India. The name LIC is equivalent to credibility and financial stability. The organization has been serving India’s economic needs for a while now. As a result, the brand has built a reputation around reliability and trust.
The organization is known for its flexible approach to housing finance solutions. The company offers loans for renovation, building, and buying. Therefore, you will not have any problem financing your housing project.
PNB Housing Finance Limited
| Loan amount | 90% of the total cost |
| Tenure | 30 years |
| Rate Of Interest | 8.50% |
| Processing Fee | 0.50% of the principal amount |
| Foreclosure Charge | Nil |
| Penal Interest Rate | No information |
PNB housing finance is one of the stalwarts of the housing loan sector. The company is known for its affordable housing loan options with flexible requirements. This makes it accessible to a broader population.
The company is known to offer some really fantastic loan options to the general masses. The loans come with affordable interest rates and a flexible tenure. This makes them great for homeowners who are on a budget.
Tata Capital Housing Finance Limited (TCHFL)
| Loan amount | 80% of the property cost |
| Tenure | 30 years |
| Rate Of Interest | 8.70% |
| Processing Fee | 0.50% of the principal amount + GST |
| Foreclosure Charge | No information |
| Penal Interest Rate | No information |
Tata Capital Housing Finance Limited is one of the leading housing finance companies in India. The business is a subsidiary of the Tata Group of companies. The financial organization has really made huge waves due to its tailor-made approach to finance solutions.
The company puts adaptability above everything else. As a result, customers claim that they were treated to a curated experience. This can be beneficial for individuals with unique financial constraints and problems.
Bajaj Housing Finance Limited
| Loan amount | 80% of the property cost |
| Tenure | 30 years |
| Rate Of Interest | 8.70% |
| Processing Fee | 0.50% of the principal amount + GST |
| Foreclosure Charge | No information |
| Penal Interest Rate | No information |
Bajaj Housing Finance Limited is one of the best lenders that you can approach for affordable housing loan solutions. Bajaj is an established brand with headquarters in every corner of India. Customers can avail of loans up to 3.5 crores. Therefore, you will not have any problem financing the loan.
Apart from a generous upper-value cap, the organization also offers delectable housing solutions at an attractive rate. Furthermore, the brand is known to provide some amazingly affordable interest rates. However, the company does offer some lowercase caps on the salary. A person needs to have a compensation of Rs. 30,000 to avail of the benefits of these house loans.
Indiabulls Housing Finance Limited
| Loan amount | 90% of the cost |
| Tenure | 30 years |
| Rate Of Interest | 9.30% |
| Processing Fee | 0.50% of the principal amount + GST |
| Foreclosure Charge | Nil |
| Penal Interest Rate | No information |
Indiabulls is one of the rarest examples of an excellent housing finance brand. The organization offers around 9.30% interest on the principal amount. This might seem steep, but the company provides instant loan options, unlike most other companies. As a result, this justifies the overall interest rate.
The company is currently striving to build an online presence across the internet. As a result, the brand is in an innovation overdrive. The organization offers housing finance solutions across a myriad of categories like Home extension, Rural Home Loans, NRI home loans, etc. Therefore, you will surely be able to get the right one for yourself.
ICICI Home Finance
| Loan amount | Up to 5 Crores |
| Tenure | 30 years |
| Rate Of Interest | 9.00% to 10.05% |
| Processing Fee | 0.75% over the principal amount |
| Foreclosure Charge | Nil |
| Penal Interest Rate | 2% per month |
ICICI is a one-stop shop for getting that perfect and affordable housing loan for your next housing project. The company is known for its massive presence in the financial business. As a result, the company caters to salaried as well as self-employed individuals with ease.
The company allows loaning up to 3 crores. The best part about the organization is that it provides for individual application. It will enable individuals to fill out the form in just 10 minutes. Subsequently, the whole process of loan approval and crediting is usually completed within 72 hours.
L&T Housing Finance Limited
| Loan amount | 90% of the total cost |
| Tenure | 30 years |
| Rate Of Interest | 8.60% to 8.75% |
| Processing Fee | 3% of the principal amount |
| Foreclosure Charge | Nil |
| Penal Interest Rate | No information |
The final financial organization on our list of best housing loan solutions is L&T Housing Finance Limited. L&T Housing Finance Limited is one of the leading names in the industry. The company offers housing finance solutions to millions of people in the country.
The organization is known to offer some of the most delectable interest rates and flexible terms and conditions. As a result, you can take out loans for house purchases, construction, extensions, etc.
The Final Thought
With that, you have reached the end of my article regarding some of the most affordable housing loan companies and the markers that you need to remember while choosing the right home loan for yourself. Keep following our page for more housing-related solutions.
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