Taking a home loan can be tiring and time consuming. It starts with shortlisting the lenders suitable to your requirements. Then you have to compare the offerings. Once you decide on the lender, you then need to arrange and submit all the required paperwork to complete the process.

Even then, it could take a while for your home loan to be approved and disbursed. But, if you are well versed with all the intricacies of availing a home loan, the procedure could become easy and fast.

Here are 6 things you should consider while applying for a home loan in India.

Home loan eligibility criteria

Lenders have strict eligibility criteria that you need to fulfil to avail a home loan. While certain nuances could vary from bank to bank, the common home loan eligibility criteria includes your credit score, age, city of residence, income, employment status, etc.

For example, to avail a home loan, you should be between the age of 18 to 65 and should have a minimum income of Rs20,000 per month if you live in metro cities and Rs15,000 if you live in other cities.

Documents

An equally important thing to keep in mind while applying for a home loan is to keep the necessary documents ready.  The lender procures most of your details through the documents you provide, which is why it is necessary that the documents are accurate and in order.

Incomplete documentation and false or misleading information can lead to outright rejection of your loan application.

Interest rates

The interest rate determines your EMI payout. Accordingly, it is one of the most important factors to consider while taking a home loan. There are two types of interest rates on a home loan- fixed and floating.

The fixed rate of interest is constant for the entire tenure and remains unaffected by external factors. On the other hand, a floating rate is determined by market rates.

Usually in the long term, floating rate of interest turns out to be beneficial in comparison to a fixed rate.

Additional charges

Apart from the interest rate, lenders could also levy some other fees and charges on a home loan applicant. Before you fill out your application form, it is important to know about these too.

The major charges that you might have to pay could be processing fee, penal interest, EMI bounce charges, foreclosure charges (on the fixed interest rate loans) etc.

These charges can significantly increase the overall cost of your home loan.

Tenure and EMI

The EMI of your home loan and the tenure is inversely proportional. If your loan tenure is longer, your EMI payout will be lower. However, it could increase the interest amount on the loan.

On the other hand, if you take a shorter tenure, then you will have to pay a higher EMI amount. Hence, it is suggested to go for a shorter tenure and payoff high EMIs if you are financially capable of doing so.

You can determine your loan EMI using a home loan EMI calculator available online.

Terms and conditions

All the charges, fees, terms and conditions are mentioned in your loan documents. You should read the documents carefully before you sign on the dotted line to get a thorough idea of the loan repayment process and related terms and conditions.

If required you can take the assistance of bank officials who would help you in understanding the documentation in a better way.

Taking a housing loan could prove to be a complex and tiring process if you are not aware of the related factors. Which is why it is necessary to have a thorough understanding of the loan process and different aspects around it.

Apply for a home loan only after comparing different options and conducting thorough research.