There are a variety of lenders and financial institutions that are part of the public sector. In addition, there are some lenders and financial institutions that are part of the private sector and HFCs that are currently providing home loan interest rates that begin at as low as 6.5 percent to 7 percent per annum.
It is a persuasive argument for prospective house buyers to apply for a home loan and make their dream of owning a home a reality as a result of the historically low interest rates that are currently available. But what happens when you have a minimum cibil score for home loan? Should you opt for a bank or HFC as your lender, and why?
Let’s find out.
Is it a good idea to opt for a lender with whom your developer has tied tie-up?
Homebuyers who need a smaller amount for a home loan and have a minimum cibil score for a home loan may want to consider continuing their relationship with the same lender if the new contract offers a lower interest rate. Otherwise, it is better to compare and enquire with other lenders too.
Before you make the final decision, you should ensure that you have researched the housing loan offers and deals that are being offered by different lenders in accordance with the criteria for eligibility for the loan as well as your financial requirements. In addition to this essential step, you must remember to carry out a credit score check online as well.
Which Should You Select: HFCs or Banks?
When choosing between housing finance companies (HFCs) and banks to obtain a home loan, it is crucial to know that banks typically offer lower interest rates, as the primary reason for this is that banks have access to a cheaper source of funds. This is something that should be taken into consideration when making this decision. However, banks are known to have eligibility requirements that are significantly stricter than those of HFCs.
However, market competition frequently prompts some of the well-established HFCs to offer cheap rates on house loans. These rates are currently lower than the rates offered by many banks. This is the situation due to the fact that a large number of consumers have access to credit score check online facility and their credit scores that are either equal to or greater than the bare minimum cibil score for home loan need to qualify. In addition, the fact that the eligibility criteria for loans offered by HFCs are not as stringent as those offered by other types of financial institutions enables these companies to assess loan applications with a greater degree of latitude than other types of financial institutions.
Now that you have a general grasp of HFCs and banks in connection to housing loans, it would be wise for you to consider the following factors as well. Specifically, it would be useful for you to consider how HFCs and banks differ, besides keeping intact the common aspect of the importance of credit score check online before applying with any lender.
It is common practice for most lenders, including banks and HFCs, to switch gears and entice prospective homebuyers with low interest rates, waivers or lower processing fees, etc. This is done in an effort to attract more borrowers, especially those whose credit profile is strong after doing a credit score check online. The conclusion of the fiscal year and the winter holiday season are the times of the year when this happens most commonly.
In addition, many lenders are concentrating on and marketing HLBT as a feasible alternative for existing house loan borrowers so that these borrowers can take advantage of historically low interest rates. This is done so that these borrowers can capitalise on the current market conditions. You decide to have HLBT transition to interest rates that are lower than the current ones.
Is it a good time to get a housing loan and buy a house at this point in the market?
Recently, the interest rates that are being charged for house loans by a variety of financial organisations (banks and HFCs) are on the lower side, though they are beginning to rise gradually due to rate hikes by RBI.
So, homebuyers who have already done the task of credit score check online and are considering making a purchase should shop around for housing loans from as many different lenders as they can discover in order to find the best potential deal. This will enable them to receive the best interest rates in accordance with their eligibility criteria, which may include income, minimum cibil score for home loan, job profile, and other considerations. This will allow them to obtain the Best Interest Rates.
After going through all of this research and deciding to get a home loan, there is one more factor that, when you have surplus cash on hand, can cause uncertainty in your mind. Prepayment.
When making plans to prepay your mortgage, it is vital to take into consideration the gains that will be obtained from investments that are already in place. If you do not do this, you could end up losing money. The interest rates on home loans are often higher than the returns on the majority of investments that create a fixed income, such as fixed deposits offered by banks. This is despite the fact that home loans may have the lowest interest rates of all retail lending products. Because of this, a surplus that has been saved in fixed income instruments such as fixed deposits but has not been allocated for any particular monetary goal can be used to repay the loan. This allows the excess to be used for its intended purpose.
It is never a good idea to prepay a loan from money used from investments that are intended to go toward reaching critical financial goals. This is because then you will be forced to take an expensive loan like a personal loan to meet the shortfall for that financial goal whose corpus you compromised upon.