Important Factors That Impact Your Home Loan Interest Rate

A home loan is a preferred credit form among individuals looking for a private living space. With the work from home culture in practice, the demand for housing loans has increased significantly.

However, availing a credit without systematic planning can lead borrowers to pay a high home loan interest rate.

Potential borrowers must check certain factors related to a housing loan for informed borrowing.

What are the crucial factors that impact home loan interest rates?

1. Eligibility

Individuals should always check the home loan eligibility parameters set by a lending institution. These criteria scrutinise an applicant’s credibility and repayment capacity.

Ideally, the eligibility parameters against a home loan are quite simple.

Salaried-

• Individuals should have a working experience of three years in a firm
• Salaried individuals should fall in the age bracket of 23 to 62 years.
• Applicants should have Indian residency.

Self-employed-

• Applicants have to fall in the age bracket of 25 to 70 years.
• They have to prove Indian residency and five years of business vintage.

Apart from the mentioned criteria, individuals should maintain a 750+ credit score to gain better home loan features like affordable interest rates.

2. Borrower’s profile

A borrower’s profile affects a home loan interest rate significantly. Lenders give preference to salaried employees due to the reliability of timely repayment. Other factors like repayment history, income stability, credit score and employment profile also impact the interest rate.

A lender would feel risk-free and approve the loan to individuals with a credible profile.

They may also offer customised offers to credible borrowers. For instance, leading financers extends pre-approved offers that make loan applications easy.

Besides, the location of the property and the loan amount significantly impacts the applicable home loan interest rate.

Individuals should know that the lending market is filled with options. A potential borrower must compare the lending institutions and their features before selecting the apply for housing loan option.

They should always opt for lenders levying affordable interest rates and housing loan terms. This will help them make significant savings on overall borrowing.

In this regard, one can use tools to calculate home loan EMI and make an informed decision.

Must Read: Home Loan Repayment Options: EMIs, Part-Prepayment And Foreclosure

These offers are applicable to financial products like a home loan and LAP. Individuals can check their pre-approved offers by entering a name and contact number.

Hence, these factors impact the home loan interest rate and overall borrowing.