Owning a house is a dream for majority of people in India. There are many housing finance companies & banks that provide a housing loan to people aspiring to buy their dream house. These companies or banks provide loans for a particular period of time by charging an interest rate on the principal amount that banks offer to the borrower. Bank or the private finance companies make profits with the interest and the borrower receives the loan amount. This becomes a win – win situation for all, the economy, the banks and the borrower as well. This is how the banks and housing finance companies in India and worldwide work.
Many banks and housing finance companies offer different loan options to the borrowers and thus there are many finance options available today in the market. The banks and housing finance companies are regulated by the government of India but the procedures and regulations of every company might differ slightly. A borrower therefore should be very careful while selecting a proper loan option, the principal amount, the interest rate, repayment tenure and so on.
They provide different types of home loans to the borrowers which include home loans for new house, loan for resale property, for construction, balance transfer, home improvement loan, home extension loans, plot loans, short term bridging loans, rural home loans and so on.
An individual can borrow individually or jointly for availing the housing finance. The maximum tenure of the loan goes up to 20 years. They grant the loans depending on the customers profile, age, income etc. The interest rate charged can be fixed or floating. In the fixed rate the interest rate remains fixed across the loan tenure while in the floating rate it changes with the market conditions. With fixed interest rate the borrower can plan the budget in advance and be prepared in advance. Whereas with floating rate of interest planning the budget becomes difficult as it fluctuates and thus there is constant uncertainty involved.
For an individual to avail the home loan from the finance companies he or she has to follow the process which starts with an individual applying for the home loans with the private housing finance companies. You can apply online through the company's websites, download the application form, fill in your details, scan and upload your documents and within few weeks you receive a mail showing the status of your loan application.
The next step is where credit worthiness of the individual is studied and the loan is sanctioned accordingly. After that, the registration of the property, signing of the agreement is done and lastly the disbursement of loan amount is done by the company or banks.
These companies charge the processing fee of about 1.25% and offer various repayment options which include the step up repayment facility which is linked to the expected growth in the individual's income. With this option the borrower gets the advantage of availing a higher amount of loan and pay lower EMI's. The flexible loan installments offer customized solutions to the borrower's repayment capacity. The tranche based EMI where he or she has to pay only the interest amount initially until the final disbursement of the loan. Accelerated repayment scheme provides the flexibility to increase the EMI which in turn helps to repay the loan amount faster and the telescopic repayment option with this option a borrower gets a longer tenure for repayment of loan which is up to 30 years.
So, as there are many intricate decisions involved a borrower has to wisely choose the banks or housing finance company which offer proper solutions and services to the borrower.
Hi, I am Tom C working with Housing Finance company as Home Loan adviser owing good knowledge of Home loan and personal loan so on.