A Few Guidelines to Get Home Loan at Minimum
Interest
How to avail a Home Loan and that too at a low-interest rate is the first thing that comes to your mind when we talk about a Home Loan.
How to avail a Home Loan and that too at a low-interest rate is the first thing that comes to your mind when we talk about a Home Loan.
Buying a house
is not only a dream but also a big task for every person. Home Loan facilities
have made it easier for you to buy a house now.
People are
often reluctant in applying for a Home Loan because of the high-interest rates
and repayment method. Let us discuss ways in which you can get a Home Loan at minimum interest.
3
Ways to Help You Get Affordable Home
Loan Rates
1. Pradhan Mantri Awas Yojana (PMAY) - Credit
Linked Subsidy Scheme (CLSS)
The Pradhan
Mantri Awas Yojana (PMAY) Credit Linked Subsidy Scheme (CLSS) is a Home Loan
scheme launched by the Indian Government. It benefits people belonging to the
Economically Weaker Section, Low Income Group and Middle Income Group of
society.
If you are
availing this scheme, you get interest subsidy on the purchase, construction,
extension, and improvement of a house or dwelling unit.
To avail of
this scheme, you should not own a house already and this should be your first
purchase. You can apply for CLSS through prime lending institutions.
2. MCLR (Marginal Cost of Funds based Lending Rate)
MCLR has been
introduced by the Reserve Bank of India to replace the base rate w.e.f. April
2016. It is a system under which the interest rate is fixed according to the
riskiness of the customer. It is the internal benchmark lending rate and is
compulsory for all the banks.
MCLR ensures
bank credit at fair interest rates. Repo rate is used in the calculation of
MCLR and this is why MCLR is revised every month to incorporate any changes in
the repo rate.
Even if you
have taken a Home Loan prior to April 2016, you can still switch from base rate
to MCLR facility.
3. EMI Calculation
The amount of
your monthly EMI plays an important role in making your Home Loan cheaper. The
smaller the EMI, the longer the repayment period. The longer the repayment
period, the expensive the loan because a long repayment period increases the
amount to be repaid in the form of interest.
Hence,
EMI calculation is vital for your loan planning. You can calculate your EMI
online using Home Loan EMI calculator. This calculator requires a few basic details
about your Home Loan and your repayment capacity to calculate the optimum EMI
for your loan.
Later on, you
can reduce your monthly instalment by making pre-payment or part-payment for
which lending institutions do not charge any fees generally.
The Bottom Line
Every borrower
has a different Housing Loan requirement. Whatever may be your need, but you
would always like to get a Housing Loan at the cheapest rate. Proper EMI
calculation and availing CLSS and MCLR can help you in getting a Home Loan at a
minimum interest rate.
