While the home loan is a smart option to fund the need for having your own home, many people still don’t go for it. It is because they are concerned that along with the EMI amount, they will also need to pay the housing loan interest charges.
In the same context, being aware of the factors that affect home loan interest rate can help you. Let’s know more about this in this short post!
Your credit score
Even though the home loan is secured, lenders still pull out your credit score as the vital parameter while determining your eligibility. If your credit score is 750 or more, then you may avail a lower housing loan interest rate and vice-versa. To maintain a higher cibil score, you need to keep repaying your existing loan EMIs on time.
The location and the value of your home
If the home that you are buying using the home loan is located in an area that is not well situated in a prime one, then you may have to pay a higher rate. It is because the value of your home will be lower if you default and lenders wish to resale it. A property in heart of the city with growing infrastructure can award you with the low interest rate.
Your age plays a big role
If you are a young home loan customer, then you may get a lower home loan interest rate with a longer tenure. It is because you have got more workable years left and you may repay the EMIs on time. If you are nearing retirement, not only your loan amount will be less, but you will get a higher interest rate with a shorter tenure. Why? It is because you have got less time to repay the debt and your default chances are high.
If you are well employed and working with a known company and have some extra sources of income, then you can enjoy lower housing loan rates.
If you are able to consider the discussed factors, then you can surely get affordable home loan rates.
