Basic Indian bank home loan terminologies to plan the finances better!

Buying a house is the most fundamental responsibility for every individual, but as the real estate prices are booming every single day, it’s hard to make the big purchase with the savings alone. This is why most people prefer opting for Indian bank home loan to avail financial aid for the big purchase. Therefore, it can be said that housing finance plays a vital role in the process of buying a home without shelling out your lifetime savings.

So, before planning to apply for a home loan, it is essential to understand a few basic terms related to the finance.

• Down-payment – A down payment is basically a percent of up-front payment paid by the home buyers. This could account for up to 20 to 30% of the property value. For instance, if the property is worth Rs.50 lakhs, then the down payment could be Rs. 10 lakhs to Rs.15 lakhs and the rest of the balance would be financed under Indian bank home loan agreement. Therefore, it is suggested to choose the property wisely to thoroughly understand the budget and your financial lifestyle.
• Interest rates – Home loan rate of interest could gulp a good portion of total repayment cost and hence, it is significantly essential to understand the interest rate and its calculation method. While in fixed interest rate method, ROI remains the same throughout the tenure; in flexible method, the interest rate could fluctuate with the market changes.
• Fees and charges – While most are aware of the obvious processing fees, many other fees and charges are generally not taken into consideration such as foreclosure charges, cheque bounce fees, duplicate statement charges, etc.
• Pre-payment – In case, the borrower wish to close the Indian bank home loan account prior its tenure, then he or she can opt for pre-payment or foreclosure option at a minimal fees. Prepayment is a facility that allows the borrower to foreclose the housing loan account. However, foreclosure is suggested only if the borrower has good surplus funds to avoid financial crisis later.
• EMI calculator – More than often, home buyers avoid planning their finances before-hand and thus, end up getting into a spiral of debt. Therefore, it is best to plan the strategies in advance and use Indian bank home loan EMI calculator to evaluate the cost of monthly instalments for the entire tenure. Since, buying a home is a huge financial responsibility, using an EMI calculator could actually help the buyers to make the right decision.

EMI calculation method: EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where

·         P is the principal amount,

·         R is the rate of interest, and

·         N is the tenure.

To apply online, visit https://www.applykaroo.com/loans/indian-bank-home-loan.