A simple guide to securing a Home Loan with Rs. 20 lakh EMI

Author : Shreya Eppili | Published On : 26 Mar 2024

Buying a home is a significant milestone in one's life, but it often requires financial assistance as a Home Loan. If you are considering purchasing a property and need a Loan with a monthly Equated Monthly Instalment of Rs. 20 lakh, here is a guide to help you navigate the process smoothly:

 

Assess your financial situation

 

Before applying for a Home Loan, take stock of your financial standing. Evaluate your income, expenses, debts, and savings to decide how much you can afford to take and repay, considering a Rs. 20 lakh Home Loan EMI amount.

 

Check your credit scores

 

Banks check your creditworthiness depending on the credit score. A higher score enhances your chances of Loan approval and favourable interest rates. Get your credit report and ensure it is error-free. If your score is low, improve it before applying for a loan.

 

Research banks and Loan options

 

Explore various banks. Compare interest rates, Loan terms, processing fees, and other charges to find a suitable option. If applicable, consider government-backed schemes for first-time homebuyers.

 

Calculate Loan eligibility

 

Use online Loan eligibility calculators provided on bank websites to estimate the amount you are eligible for based on your income, age, debts, and other factors. This gives you an idea of how much you can borrow.

 

Save for a down payment

 

While the Loan covers much of the property's cost, you still need to make a down payment. Save responsibly to accumulate the required down payment, which ranges from 10% to 20% of the property's value, depending on the bank policies.

 

Gather necessary documents

 

Prepare and organise all the documents required for the Housing Loan application process. Standard documents include proof of identity, address, income, employment, tax returns, property documents, and bank statements. Ensure they are updated and accurate.

 

Apply for pre-approval

Consider applying for pre-approval from multiple lenders. Pre-approval offers an estimate of the Loan amount you qualify for and demonstrates your seriousness as a buyer to seller. It simplifies the home search process and strengthens your bargaining power.

 

Submit Loan application

 

Once you identify the property you wish to purchase, submit a formal Loan application to the chosen lender. Provide all necessary documents and complete the application form accurately. The bank will evaluate your financial profile thoroughly.

 

Review Loan terms

 

Review the Loan offer carefully, including the interest rates, EMI amount, repayment tenure, processing fees, prepayment charges, and other terms. Ask for clarification on any aspects you do not understand and ensure there are no hidden costs.

 

Close the deal

 

Upon Loan approval, finalise the purchase agreement with the seller and complete the necessary legal formalities. Coordinate with the bank, seller, and relevant authorities to facilitate a smooth Loan amount and property transfer disbursal.

 

Conclusion

 

By following these steps responsibly, you can more confidently navigate the process of obtaining a Home Loan with a Rs. 20 lakh EMI.