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A lot of people seek cheap home loans in India. Most borrowers want the most affordable and perfect home loans. However, it is not always possible. In some cases, borrowers get trapped into unsuitable housing loans as they fall for the so-called the cheapest home loans in India. So, here are some myths about these cheapest house loans that we will advise you to stay away from to avoid probable financial mistakes.

This is the lowest home loan rate

A borrower may get a housing finance offer with the lowest interest rates possible, which may lead to overlooking important details. Whether you have opted for the floating interest rates or fixed interest rates, it can always witness an upsurge through the tenure of the home loan. So, while it may seem like getting the lowest interest rate is crucial, it certainly isn’t enough. These rates can and will fluctuate invariably. So, a little foresight is a key criterion currently rather than just the lowest interest rates for your home loan.

There are no hidden charges and fees

This is a popular way to suggest transparency. However, the reality behind these kinds of claims lies in the home loan agreement. Very few people take the time to go through the home loan terms and conditions. Most borrowers are so exhausted with the home loan process that they do not want to understand the implications of these rules and regulations. Based on a blunt statement like “no hidden charges”, several borrowers take up the loan offer. This doesn’t effectively make it the best home loan in India, though.

Cheapest home loan is the best home loan in India

If you take a look at the entire tenure for home loan repayment, you would realize that the best home loans in India aren’t merely about the lowest interest rates. They allow the breathing space to borrowers. There are several financial variables that come into play over a period of 20 to 30 years such as repayment options, loan tenure, loan restructuring, type of interest rates, prepayment charges, foreclosure charges, etc. Selecting the right housing finance company will allow the borrower to access these options effectively. So, select the right lender rather than just the lowest interest rates to help you to abide by the repayments more efficiently.

When you compare the housing loans in India, focus on the best one for you rather than the cheapest one available. You need to have a long term approach for home loans. Select a smart and helpful housing finance company that will assist you in every way possible so that you will repay your home loan comfortably and effortlessly.

You are about to enter into a legally binding financial contract for 20 to 30 years. Hence, it is vital to take the necessary precautions rather than regretting your decision later. Though a home loan is the only way to ever own a home for most borrowers, you need to take a smart risk rather than gaining a liabilitythat you cannot afford to repay. Here are the precautions that you need to consider:

Research well:

First time borrowers will always benefit more from online research. However, it is not the only way to find the required information about several aspects of the home loan. So, talk to the loan officer, branch manager and resolve all the queries you have. Take advice from a personal finance expert; however, don’t take out of context generic advice. For example: It is a standard stipulation in the home loan industry to opt for a home loan with the lowest duration possible, since that way you save sufficient funds that you would have otherwise paid as interest. But, if you have other liabilities or expenses, which does not allow you to pay more EMIs, then you will have to choose the tenure based on your repayment capacity and prepay the loan as and when you can. It will be a better strategy than setting up higher EMIs than what you can afford.

Prioritize right:

A home loan package is a multi-faceted financial product. You cannot be driven to find the lowest interest rates possible. You need to understand and select the criteria that will affect you personally. For example: Most organizations recommend step up repayment option to professionals. Will you financially be in a position to afford that? You cannot select this option without doing further research in your personal finances and taking the right advice. Simply put, selecting a wrong repayment option can be a costly mistake. You may like the no-prepayment charges policy of floating interest rates or the lower home loan rates for the floating interest. But, if you are not in a position to afford the potential fluctuations, then you will have to stick with fixed rates. Don’t choose the home loan structure by getting swayed emotionally. You need to play it smart and play it right.

Negotiate efficiently:

Once you meet the home loan eligibility criteria and submit the documents required for home loan, you will get a chance to personalize your home loan agreement. This is the right time and if you don’t take advantage of it, you never will. Whether you want lower interest rates or anything else, this is the time to ask for it. So, be effective and finance-savvy while you negotiate for the details. Most borrowers are not aware about it and miss out this opportune moment.

Eventually, when you obtain a satisfactory loan agreement, you will be glad about every minute that you spent in making it work for you.