Today when you choose a home, you don’t just choose which home to buy, you also choose which home loan service provider to do business with, which is also a pretty big commitment. Today, there is a wide choice of home loan providers in India and investors can pick and choose.
The question is, how to pick and choose the home loan providers suited to your needs? Obviously, there are objective criteria that the borrower can use to zero in on the best home loan provider in India.
Here is a quick rundown of the various criteria for a preferred lender.
1. Reputation and standing of lender matter a lot
You may wonder as to why this matters to you as a borrower. That’s because, you are looking at getting into a long term relationship. You want a reputed name as that will give you the confidence that the lender will not resort to unfair means to impair your interest in the property.
You want a home loan provider that not only arranges funds but also offers a holistic solution. That is only possible if the home loan provider also has advisory skills. Above all, you want the lender to be reasonable if you run into financial problems, and not employ strong arm tactics.
2. Makes money sense in the long run
Quite often, in our home loan quest, we tend to get carried away by promises of the short term variety. For example, a floating rate loan makes sense when rates are high, not when they are low. Similarly, no fixed rate loan is fixed in the real sense of the term.
Some home loan providers load too much of upfront cost or put back-end costs like prepayment charges etc. All these add to the cost of the home loan in the long run. When you're deciding on the best home loan provider in India, your priority must be to choose one that makes business sense for you in the long run.
3. Look for customer-oriented features
In the past, the pan-India network was an important consideration. However, now it is not only about that, it is also about the kind of digital features and add-ons that the lender provides. Can the lender provide access to the loan account online? Can they allow the EMI/interest certificate to be downloaded online? Can the borrower make requests for changes online with adequate authentication?
You also need some very special features like instant online loan approvals, doorstep service, dedicated relationship managers and robust after-sales. In addition, some home loan providers also give you value added services like optional insurance facility, asset insurance, liability cover, etc. Look for the complete package.
4. Flexibility, versatility, and longer tenure
What does this really mean? When you are evaluating home loan providers in India, this is one of the key features. You need flexibility in terms of maximum home loan eligibility, customized EMI Options, switch between fixed and floating rate, etc. Loan versatility refers to ensuring you get the maximum loan eligible, either through other assets or co-borrowers. Finally, longer tenure matters as it can reduce the pressure in the initial years. The home loan must also come with added features like flexible tenure, no prepayment charges, converting to bullet EMIs, etc. These finer aspects make the loan provider more attractive.
5. Look for the best prepayment options
Why does this matter? Home loan prepayment is an important clause especially when you have the funds and want to close the loan. It is a good idea as it frees up cash flows and improves credit standing. However, the prepayment costs matter a lot. While variable loans cannot charge prepayment charges, fixed loans do have prepayment charges ranging from 0.5% to 2%. That can be a big hit on the home loan. Bargain for zero prepayment penalty and prefer a bank that offers this facility.
6. Go for a reliable and trustworthy lender
People often wonder how does the lender being trustworthy matter? Actually, it does. Your property papers are hypothecated with the lender so you want a trustworthy name holding it. Also, you need a reliable lender that has a reputation to defend. Such lenders give the best deal and also avoid the use of strong arm tactics with their customers. Above all, the lender is required to be fair and transparent with you and that is only possible if the lender is reliable and trustworthy.
These are key points to consider when you look for the ideal home loan providers. It is not just the quantitative factors, but also qualitative factors that help you zero reach the decision on the best home loan provider in India. After all, the solution has to be customized to your unique requirements.