How to save money by opting for home loan balance transfer

Home loan balance transfer is the best way to save on interests. By transferring a home loan to a provider who offers you a lower rate than your existing provider you can save on your EMIs. There has been a dip in the home loan interest rates post demonetization. This happened because a huge amount of cash was deposited in bank accounts across the country. With this surplus of cash banks could afford to lower their interest rates by a significant amount, thus making it cheaper for people to avail of home loans.

Post the demonetization, Home Loan Interest Rates have gone down by as much as 50 basis points. This means that those who apply for home loans now will get much better interest rates than those who have existing home loan. If you’re one of the people who already have a home loan do not fret, you too can avail of the benefits of this dip in rates.

How? By opting for a home loan balance transfer! A home loan balance transfer can help you save a substantial amount of money if you choose a provider who is offering a much lower rate than your current provider. It also only makes sense for you to opt for a transfer if you have a long tenure left to repay your loan.

If you’re considering a home loan balance transfer in the near future, here are some essential things you should know about it.

1.  Savings is the main reason for transferring home loans. But make sure that you opt for a Home Loan Balance Transfer only if the total savings in interest payout is substantially higher than the cost incurred while transferring the loan. Usually, the new lender will charge various fees, such as conversion fee, processing fees and administrative charges during the loan transfer.

2.  Transferring your home loan to a new lender is similar to availing a fresh loan, where the new lender will have its own set of terms and conditions. You can use it to re-set your loan EMI and tenure and top up as well. Opt for a home loan transfer if your existing lender is not allowing you to reset the terms and conditions of your loan.

3.  Usually banks and NBFCs provide top up loans to existing borrowers. These are just like personal loans but their interest rates are lower than a separate personal loan. One may require a top up in case of funds required for an emergency or in case of a home loan for renovations. Transfer your loan only if your current provider is not allowing you a top or if the new provider is offering you a better rate.

This Gudi Padwa Know about the different types of Home Loans and choose your best fit

Gudi Padwa just went by, and like every year banks and finance institutes all over the country are offering attractive deals on home loans. This is the time of year when everyone is in a hurry to get their finances in order. With loan rates being favourable, now perhaps the best time to get your housing finance. The financial is coming to an end soon, which means most of us will be receiving handsome bonuses as well. This makes the coming few days the best times for us to invest in new things, be it property, automobiles or any other sort of investment.

For someone who is new to the world of finance or, has recently started earning, understanding home loans and home loan interest rates can be quite daunting. But this knowledge can help you make good financial decisions, in the future if not immediately.

The most basic thing you need to know about house loans is that they have two main types of interest rates. These are fixed and floating interest rates. Banks and non-banking financial companies offer both fixed and floating interest rates. Since home loan interest rates are the most important aspect of the loan, getting it right is the key to repay without any financial stress or default over time.

Here are a few key things that you should know about home loan interest rates.

1.  Fixed rate of interest on a loan means that the equated monthly installments or EMIs are constant over the tenure of the loan. On the other hand, for floating interest rates, the EMIs fluctuate as per the market dynamics as interest rate increases or decreases.

2.  Fixed interest rates are always set higher than floating interest rates, by 1 to 2.5% at the time of the sanction of the loan. This can be both and advantage and a disadvantage. Since these rates remain constant you don’t have to worry if there is a hike in the housing loan interest rates due to the passing of a bill or implementation of a new rule, but at the same time if the rates see a dip, there is no benefit to you.

3.  Floating interest rates are usually lower than fixed interest rates although parameters like inflation and current account deficit are used in calculation of base rate by RBI which can mean an uncertainty and different EMI for each repayment or installment for the loan. This can be difficult to keep track of as each installment may be different.

These are the most basic things you should know about housing finance, there is much more to learn, but as they say, if you’re clear on your basics you should be able to make wise decisions about your finance.

What you should know about home loan interest rates before you get a loan

Gudi Padwa just went by, and like every year banks and finance institutes all over the country are offering attractive deals on home loans. This is the time of year when everyone is in a hurry to get their finances in order. With loan rates being favourable, now perhaps the best time to get your housing finance. The financial is coming to an end soon, which means most of us will be receiving handsome bonuses as well. This makes the coming few days the best times for us to invest in new things, be it property, automobiles or any other sort of investment.

For someone who is new to the world of finance or, has recently started earning, understanding home loans and home loan interest rates can be quite daunting. But this knowledge can help you make good financial decisions, in the future if not immediately.

The most basic thing you need to know about house loans is that they have two main types of interest rates. These are fixed and floating interest rates. Banks and non-banking financial companies offer both fixed and floating interest rates. Since home loan interest rates are the most important aspect of the loan, getting it right is the key to repay without any financial stress or default over time.

Here are a few key things that you should know about home loan interest rates.

1.      Fixed rate of interest on a loan means that the equated monthly instalments or EMIs are constant over the tenure of the loan. On the other hand, for floating interest rates, the EMIs fluctuate as per the market dynamics as interest rate increases or decreases.

2.      Fixed interest rates are always set higher than floating interest rates, by 1 to 2.5% at the time of the sanction of the loan. This can be both and advantage and a disadvantage. Since these rates remain constant you don’t have to worry if there is a hike in the housing loan interest rates due to the passing of a bill or implementation of a new rule, but at the same time if the rates see a dip, there is no benefit to you.

3.      Floating interest rates are usually lower than fixed interest rates although parameters like inflation and current account deficit are used in calculation of base rate by RBI which can mean an uncertainty and different EMI for each repayment or instalment for the loan. This can be difficult to keep track of as each instalment may be different.

These are the most basic things you should know about housing finance, there is much more to learn, but as they say, if you’re clear on your basics you should be able to make wise decisions about your finance.

Why you should get a Top-up Loan for you Home Renovations

Buying a new home is a big moment for anyone. But after living in a new home for a while, a new home can seem a little boring. You can always do it up with a little renovations, but to make any changes you need to spend money and that can be difficult when you’re already paying off home loans. To make it easy for you to keep your home as good as new, banks have introduced home renovation loans. 

A home renovation loan can be taken as a top-up to your house loans or can be taken by itself. When you take a home renovation loan as an add-on, the interest is added to your home loan interest rates. This way you don’t need to pay separate EMIs for two loans. This loan is great home finance tool, it can help you keep your home looking as good as new.

If you wish to avail a top-up loan for your home renovations here’s everything you have to know about it.

1.  Eligibility: Top-up loans can be availed only by someone who has an existing house loan. There are other preconditions too that you need to fulfill before you become eligible for such a loan. Here are some of the criteria that are taken into consideration.

•  Minimum period: You need to have started repayment of your housing loan and paid interest for a certain period before you are eligible for your home loan. This period may differ from bank to bank.

•  LTV limit: Loan-to-value (LTV) is the amount you’re allowed to borrow on your existing housing loan. The LTV ratio is fixed at 80-85% of the present value of your property. 

•  Tenure: The tenure of top-up loan runs concurrently with that of your home loan. So if you have 10 years remaining for your home loan repayment, your top-up loan tenure cannot exceed the remaining term. 

2.  Benefits: The first and foremost benefit of a top-up loan for home renovations is that you don’t need to manage multiple loans when you get a top-up. The top-up amount is simply added to your existing loan amount and the top-up loan interest rates are also paid through a single EMI. There are no restrictions on the usage of this amount. You can use it for whatever you want, however you want.

3.  Other uses: If after a few years of paying interest on you house loan you have a big expense coming that is related to your business or family, you can opt for a top-up home loan, instead of going for a personal loan.

4 Things That will help you Pay your Home Loan even During Financial Crisis

What happens if a borrower is unable to pay his/her home loan EMI? This is a question that arises in the mind of every home loan seeker, but they’re too afraid to know the answer. Getting a home loan is a big step in everyone’s life. But what if, due an unforeseeable circumstance you find yourself in the middle of a financial crisis and are unable to pay your home loan EMIs? Will you immediately be termed as a loan defaulter? The answer is no. The process of becoming a defaulter is a long one. If a borrower is unable to pay his or her home loan instalment once, due to an unforeseeable expense or a financial emergency, the bank will not immediately term him or her as a defaulter. If you miss one EMI the most a bank can do is send you a reminder mail regarding the same. The bank may also call the borrower to ask about when the payment will be made.

The trouble begins if a Home Loan borrower fails to pay his EMI three months in a row. The bank will send him/her, a number of reminder mails and finally a legal notice. This is when the borrower is termed as a loan defaulter. The term can severely affect one’s CIBIL score, making it difficult for them to borrow in the future. If the borrower fails to respond to all of these notices and calls and still fails to clear his/her dues, the bank will send an officer to their residence to affix a notice on their door or even print a notice in the newspaper. In three months after this, the bank will declare the property as a non-performing asset. In two months after that, the bank will take possession of the property and if the borrower fails to clear his dues in six months the bank will auction it off.

No one wants to be in this situation, but the future is a tricky thing and the only thing you can do to arm yourself for whatever it throws at you is to be prepared. Here’s how you should handle your Home Loan EMIs while going through a financial crisis.

1.  Get in touch with bank and inform them about your problems, they may be able to give you some leeway or at least wave off the late charges on your EMI.

2.   Re-negotiate your loan by increasing the tenure, so you can pay smaller EMIs.

3.  Get home loan insurance in advance, so you don’t need to worry about your loan repayment.  

4.  Spend wisely, keep track of all your expenses, avoid unnecessary expenses and save up to pay your EMIs.

Why you Should Explore the Home Loan Top-Up Option

Buying a home and taking a home loan is not just a onetime expense. A home needs a lot of care and work. When you purchase a home, you also need to purchase with it all that goes into that space, from electronics to furniture, to lights and fixtures and even the tiles and flooring. These are not small expenses and a lot of times your housing loan alone is not sufficient to fulfil them. Even if you can afford all these things the first time, they can be a recurring expense. A home needs repair and renovations as regular intervals for it to remain nice and sturdy. And these expenses are not small either.

A top-up home loan is an exclusive option given to home loan customers that gives them the option of borrowing an amount additional to their existing loan. This money can be used for home improvement, repairs or any other thing you many need it for.

Here’s what you need to know about a home loan top-up.

1.  Eligibility: Top-up loans can be availed only by someone who has an existing housing loan. There are other preconditions too that you need to fulfil before you become eligible for such a loan. Here are some of the criteria that are taken into consideration.

·         

•    Minimum period: You need to have started repayment of your housing loan and paid interest for a certain period before you are eligible for your home loan. This period may differ from bank to bank.

·         

•     LTV limit: Loan-to-value (LTV) is the amount you’re allowed to borrow on your existing housing loan. The LTV ratio is fixed at 80-85% of the present value of your property. 

·        

•        Tenure: The tenure of top-up loan runs concurrently with that of your home loan. So if you have 10 years remaining for your home loan repayment, your top-up loan tenure cannot exceed the remaining term. 

1.  Benefits: The first and foremost benefit of a top-up loan is that you don’t need to manage multiple loans when you get a top-up. The top-up amount is simply added to your existing loan amount and the Top-Up Loan Interest Rates are also paid through a single EMI. There are no restrictions on the usage of this amount. You can use it for whatever you want. Be it renovation work, a new car or for your business or even healthcare.

2.  Best to opt for top-up loan: If upon buying a new home you require more money to purchase additional parking space, do get some renovation work done or to by something for your new home you can opt for a top-up home loan. If after a few years of paying interest on you Housing Loan you have a big expense coming that is related to your business or family, you can opt for a top-up home loan, instead of going for a personal loan.

Avail the benefits of the Pradhan Mantri Awaz Yojana

In a move to ensure that more and more people can fulfil their life-long dreams of owning a home, the Prime Minister of our country announced the Pradhan Mantri Awas Yojana, in the beginning of this year. This scheme is specially designed for the lower and middle income groups. This is an interest subsidy scheme that has been named as 'Credit Linked Subsidy Scheme for Middle Income Groups - CLSS (MIG)'. As per this new subsidy, middle-income groups with incomes in the eligible range will get a subsidy on their interest rate of three to four percent.
This scheme will ensure that more and more people are eligible for home loans and can fulfil their wishes of owning their own homes. Here’s what you need to know about this CLSS scheme and eligibility.

1. People whose incomes fall in the range of 6 lacs to 18 lacs are eligible for this subsidy under the CLSS.
2. People whose housing loans were approved and those whose home loan application was in review since 1^st January 2017 are eligible for this subsidy.
3. Peoples who have an annual income of 12 lacs are eligible for a subsidy of four percent on their home loan of up to 9 lacs. People who have an annual income of 18 lacs are eligible for a subsidy of three percent on a home loan of 12 lacs according to the Prime Ministers’ address on the eve of New Year.

Here are the income slabs for the CLSS eligibity under the Pradhan Mantri Awas Yojana.

1. People with an annual income of Rs.6 lacs and below can avail of loan of Rs.6 lacs at an interest of 6.5% for tenure of 20 years.
2. People with an annual income of Rs.12 lacs and below can avail of loan of Rs.9 lacs at an interest of 4% for tenure of 20 years.
3. People with an annual income of Rs.18lacs and below can avail of loan of Rs.12 lacs at an interest of 3% for tenure of 20 years.

Here’s how this scheme will affect home loan interest rates.

1. The interest subsidy of four per cent under CLSS (MIG) will bring down EMIs of borrowers by Rs. 2,062 per month and Rs. 2,019 per month on a housing loan of Rs 9 lakh and Rs. 12 lakh respectively.
2. The total interest subsidy accrued on these loan amounts will be paid to the borrowers up front in one go. This in turn will reduce the burden of EMI on the user.
3. The tenure of these loans has been specified as 20 years or as preferred by the borrower, whichever is lower.

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Fixed Interest Rates v/s Floating Interest Rates

Buying a new home can be a tedious process. You have to first select your dream home, put your finances in order, and then approach a bank or NBFC for a housing loan. If you’re lucky and your CIBIL score is good enough your loan can get sanctioned within days, but before that happens you need to agree upon an interest rate for your loan. Home loan interest rates are of two types, fixed rates and floating rates. Since home loan is usually a long term commitment, choosing between fixed and floating interest rates is usually a tough decision for most applicants.

Let us simplify this process for you, by explaining what both these interest rates actually mean and what they entail.

Banks and non banking financial companies offer both fixed and floating interest rates. Since interest rates are the most important aspect of any loan, getting it right is the key to repay without any financial stress or default over time.

Fixed rate of interest on a loan would mean that the equated monthly instalments or EMIs would remain constant over the tenure of the loan. On the other hand for floating interest rates, the EMIs would fluctuate as per the market dynamics as interest rate increases or decreases.

Fixed interest rates are always set higher than floating interest rates, by 1 to 2.5% at the time of the sanction of the loan. This is can be both and advantage and a disadvantage. Since these rates remain constant you don’t have to worry if there is a hike in the housing loan interest rates due to the passing of a bill or implementation of a new rule, but at the same time if the rates see a dip, there is no benefit to you.

Floating interest rates are usually lower than fixed interest rates although parameters like inflation and current account deficit are used in calculation of base rate by RBI which can mean an uncertainty and different EMI for each repayment or installment for the home loan. This can be difficult to keep track of as each installment may be different.

Both these rates have their own advantages and disadvantages.  Before choosing one, a borrower needs to do proper research as to which one best suits him. 

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Is this the right time to transfer your Home Loan?

With the huge amounts of funds deposited into banks during demonetization in India, banks have reduced their home loan interest rates a great deal. A number of banks have reduced their housing loan interest rates by 50 basis points making their current rate is 8.5 per cent. Following SBI other banks and NBFCs too have reduced their rates, one whom has reduced its housing loan interest rates by 45 basis points. These rate cuts will mainly benefit new borrowers. But this doesn’t mean that existing borrowers cannot benefit from these reduced rates at all.

If you currently have a home loan and are thinking of transferring, you loan due to lower interest rates at another provider this just might be the right time to do so. Here are some factors you can consider that would help you decide whether you should opt for a home loan balance transfer now:

1.      Savings is the main reason for transferring home loans. But make sure that you opt for a home loan balance transfer only if the total savings in interest payout is substantially higher than the cost incurred while transferring the loan. Usually, the new lender will charge various fees, such as conversion fee, processing fees and administrative charges during the loan transfer.

2.      Transferring your home loan to a new lender is similar to availing a fresh loan, where the new lender will have its own set of terms and conditions. You can use it to re-set your loan EMI and tenure and top up as well. Opt for a home loan transfer if your existing lender is not allowing you to reset the terms and conditions of your loan.

3.      Usually banks and NBFCs provide top up loans to existing borrowers. These are just like personal loans but their interest rates are lower than a separate personal loan. One may require a top up in case of funds required for an emergency or in case of a home loan for renovations. Transfer your loan only if your current provider is not allowing you a top or if the new provider is offering you a better rate.

Transferring home loan to a new lender helps one to reap benefits of a fresh loan in itself. Having a better rate of interest is beneficial in the long run and if need be one can always opt in for better rate provided by banks, NBFCs or other financing institutions. Click here to know more about home loan interest rates.

Is Your Home Loan Interest Rates Too High With Existing Lender?

A housing loan helps fund a major portion of the money required to buy a home. A home is a sign of stability for most of us. It is also one of the biggest investments thereby ensuring financial security in the longest run. Availing housing loan also gives you the benefits of saving your taxes. These benefits along with their clauses are guaranteed under section 80 CC, 24, 80 EE of the Income Tax Act.

The principal i.e. the amount your lender lends you, home loan interest rates on that amount and the tenure of the loan are some of the important aspects. These components help you make your decision. With several banking and private financial institutes in the market, you have a wide option of lenders to choose from. With a stiff competition among them, they vie for your attention by offering you the lowest housing loan interest rates and special offers which may include great extent of personalization for you. 

Interest rates may be of two types – fixed rate and floating rate. Fixed interest rate implies that your home loan interest rate remains constant throughout your loan tenure. In the floating type, the interest rate fluctuates in tandem with the market. Fixed interest rates are generally higher compared to floating ones. Floating interest rate is believed to be less expensive as compared to its counterpart. With several financial companies, you have an option to switch between either of the interest rate types. You need to understand your financial situation well before you can decide the type of interest rate that best suits your requirement.

The interest rate offered in the market as of today ranges between 9.50% and 12.50%. There are some companies providing rates as low as 9.15% to 9.30%. You have all the tools available on the internet to help compare between the interest rates offered by the best of companies. Opt for the one that offers you a low interest rate and perfectly accommodates your financial requirements.

You can also make use of other tools like eligibility calculator and EMI calculator that are easily available on the internet for your disposal. These should be conducted as part of primary research once you start hunting for your home loan lender. Your monthly income, age, existing loans, CIBIL score are some of the factors that determine how much loan amount you get. The internet gives you access to a lot of information and details to help get started on procuring your housing loan.

Which are the companies offering best home loan interest rates?

Looking for a housing loan? What are the factors to consider before you finalize the company to be your lender? With the growth and tremendous outreach of several bank and non-banking financial institutes, you have a wide range of options for your home loan. Some important elements to focus on include the principal amount you are eligible for, home loan interest rates, EMI, tenure, and more.

The best way to start is to look at your financial background. Consider your savings and understand the long impact taking a loan can have on you or your finances. You may have a family that is financially dependent on you. A loan at no point of time should come in the way of their wellbeing. Ask for help from a professional advisor if need be. Taking a housing loan is a big step and a misstep can have unfavorable consequence.

Once you know you are ready, start looking for a company that offers you not only the best deal but a great extent of customization to suit your needs. To learn more about home loan interest rates, the internet is the place to get started. There are a number of reliable websites that offer an overview and comparison between the offerings of top financial companies – banking and non-banking both.

 

The housing loan interest rate applied by the company may be fixed or floating. Fixed rate of interest is where the home loan interest rate remains constant throughout the tenure. Floating interest rate sees fluctuations according to the market-lending rates. Most of the companies today offer variable i.e. floating interest rates. In the case of fixed interest rate, the EMI you pay stays constant just like the rate. With fluctuations in rate, your EMI will go up or down as per the rate. So if you opt for floating interest loan, you got to be prepared to shell out extra if the rates are high or enjoy saving in a situation vice versa. Fixed rate of interests may be costlier compared to floating interest rate. Evaluate the pros and cons before finalizing the interest rate that suits your financial condition well. Keep a watch on the market rates yourself when you choose a loan with floating rate of interest.

The internet offers a lot of resources for you to make a smart and informed decision. Once you pick the company of your choice, make a thorough research and educate yourself about details related to loans.