5 Key Points to Understand Before Taking a Home Loan Online

Do you plan to own a house any time soon? Being a homeowner gives you a sense of accomplishment and confidence you won’t get while renting. Sometimes, renting denies you much freedom you want since it requires you to fit within the tenant’s conditions. But that’s not the case with homeownership.

Today, getting home has become easier than ever. If you’re a salaried person or self-employed, you can access a home loan online and repay with friendly interest rates. That allows you to get the home of your dream at any favorite location as you desire.

But before making any financial commitment to buy your home, you need to consider several factors like loan type, additional loan charges, availability, and the repayment period. Remember, taking a home loan is a big decision that impacts your financial health for many years to come. So, ensure to be keen on making the right financial decision.

5 Major Things to Consider Before You Choose a Home loan

  • Loan Interest Rate

You’ll pay some interest over the borrowed money. But all lenders don’t charge the same interest rates. Therefore, getting a financial service provider with a lower home loan interest rate today can save you a lot of money.

Many lenders allow you to choose from two types of interest rates. First, you have an option of fixed or floating interest rates. Floating home loan interest rates change over time based on overall market conditions. That means you might be paying more or less by the end of repayment tenure. On the other hand, fixed interest rate doesn’t adjust over time. 

So, if you expect the market interest rates to decline in the future, go for a floating interest type. That allows you to save in the long run since the rate can be lower by 1-2% than fixed rates. You may opt for a fixed rate if the interest rates are likely to rise in the future.

  • Repayment Tenure

A house loan repayment period is another critical factor you should consider while applying for a home loan online. Does your lender allow a ten, fifteen, or twenty-year repayment period? Taking a loan with a longer repayment tenure will be more conducive. It eases your equated monthly installment. However, if you intend to save the cost of your home loan in the form of interest repayment, get a loan with a shorter repayment period.

For example, if you take a housing loan worth Rs.80 lakh to be paid within 15 years at a rate of 8.25% p.a., you’ll pay EMI of about Rs.77, 611 leading to a total interest of Rs.59, 70, 000. When you take the same loan at a similar interest rate but with a 20 years repayment period, the monthly installment comes down to Rs. 68,165. But the total interest will rise to Rs. 83,59,760.

To avoid financial constraints, make sure your monthly loan repayment doesn’t take more than 30% of your disposable income. You should also factor in income prospects, age, and other financial obligations before settling on any repayment tenure.

  • Eligibility Criteria

You’ll get multiple lenders with a favorable home loan interest rate today, having different requirements to qualify. Many lenders look at your credit score before giving out a home loan. Some require you to have a high credit score. Others have a relaxed credit score requirement. You will also get lenders who consider job stability, level of income, and age before giving you a loan. Ensure to check the eligibility criteria required by any lender before applying for a home loan.

  • Loan Associated Charges

Interest charges on loans aren’t the only cost you incur when you take a home loan. On top of the interest rate, you will pay the processing fee, foreclosure charges, and late repayment penalties. Therefore, look for the lenders who charge a friendly processing fee when applying for a loan. This helps you save some costs. You should also discuss with your lender about penalties for late payment.

  • Loan Amount 

What is the cost of the home you want to buy? Can your lender offer that amount? Or do you qualify for that amount? You need to answer these essential questions when applying for a home loan online. Many lenders provide housing loans that range from 75 to 90 % of the property prices. Therefore, before choosing a lender, determine how much they can offer. You may pick a lender who allows you to add a co-applicant, which increases the amount you qualify for.


Buying a home is a big step in life. Apart from being happy, owning a house gives you a lot of fulfillment, safety, and security. If you’re employed or doing business that brings income, you can apply for a home loan and enjoy the freedom that comes with homeownership.

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