5 smart ways to get the best interest rate on your loan

06-Nov-2018 written by : FSI-Team

Interest rate on your loan

Home is where we start and end the day with. It is every individual’s dream to have a perfect house how they exactly thought it for. Loans have really made it easier today for getting that house that anyone would have asked for! Different banks or NBFCs have lucrative offers and schemes to attract the customers and approve the loan and get the offer cracked.

However, no one will take a risked profile and approve the application which is not suited according to the normal norms which lenders have to follow. But, if there can be genuine reasons that can be considerate, banks may adjust a few things. CIBIL score is the first things that are to be checked while loan approval. So the borrower should always be aware and in sync with the score that they have. As, if the score is average or bad, they will definitely not approved.

Except for the score, check out these five ways where you can have the best interest rates for the home loan that you are applying for.

1. Always Negotiate

Banks would offer you the rate of interest with which they can also have better numbers. Do not blindly go for it. Whatever they must have asked you for, always negotiate. There is no compulsory and standard rule of the interest rate that is being offered to the borrower. So, don’t feel shy, eventually, it is your money that is going. So, talk to the lender and always try to settle in the interest rate lesser than the one that is offered to you.

2. Compare between banks.

Go, check the market. There are so many banks and lenders who offer home loans. Everyone offers the loan at different rates. You must check which financial institutions would offer you the best home loan interest rate. What you have to consider is that a home loan is going to have lasted for a very long period of time. A little laziness in not checking in different banks may cost you a huge amount when calculated compound for the whole of the loan period. Also, considering the first point, you may go to a bank and say that the earlier bank where you went was giving you better offer and that can help you negotiate more!

3. Fixed and Floating Interest

When it comes to home loan the interest rate is calculated in two ways. Fixed interest and floating. What is fixed and floating interest rate? Fixed rate of interest is the interest rate where for the whole tenure the interest rate is constant. Fixed. Floating is the one where the interest rate is changed in credibility with the market. It is usually difficult to think what may cost you better, but it is good to take advice from a different lender and then get to this decision as even a one percent change becomes very huge when it comes to twenty or thirty-year tenure with a huge amount of the loan.

4. How much can you borrow?

It is important to know two factors while taking the loan. How much are you allowed to borrow and how much you would be able to pay? Home loan interest rate also depends on the debt burden ratio one has. Do not, in overconfidence we should try and take the maximum loan as possible.

5. Additional Cost

Loans are not as simple as only, Principle amount and Interest Rate for a fixed tenure. There are other additional costs too! From processing fees to approval, all these are plus the principal amount and interest rate. What if you want to pre-close the loan? How much will that cost be such a case? Because in some types of loans pre-closure will take more than what you have to otherwise pay!

Buying a house is a big thing and that does not happen every forth night. It is a big decision.



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