Go the online way for hassle-free, faster home loan approvals

The credit landscape in India is witnessing a revolution of a new kind. As innovative technologies are developing, the FinTech industry is tying together lenders and borrowers in a new way. Loans can be availed without having to wait for long hours at the bank. For example, if you are planning to apply for a home loan, there is no need to run around from bank to bank with a heavy file in hand. Thanks to the digital revolution, there are several platforms through which you can get your housing loan approved in a much more secure and faster manner. Read on to learn more about the advantages of taking the online route.

Better access
There are a lot of processes involved in applying for a home loan. Traditionally, you would have to approach the bank physically to seek out information on offers, interest rates, etc. Now, all the important information can be found online. Even sourcing the loan application form becomes much easier as it can be downloaded online.

Constant status updatesProspective borrowers are regularly updated about the status of their home loan application. From the time they login to their online profile to the time of the reimbursement of the loan, the customer is privileged enough to get constant updates.

Better reach
The digital revolution in finance is making it easier for all sections of the society to have access to credit. This means that people from remote and rural areas also have a high chance of getting access to information and apply for loans. Even if there are no banks in such areas, banking services can be availed online.

Turnaround time reduces
There is no need to wait in endless lines and run around trying to get your paperwork in order. You can compare home loan interest rates offered by various lenders online and apply for a home loan at the click of a button. Loan approvals also happen at a much quicker pace. This way, the end customer receives better services and the bank saves a lot of time.


Tailor-made products
One of the other main advantages of this type of loan application method is the fact that customers can customise their loans as per their personal financial requirements. This will help a lot of people get access to better credit facilities in time of need.


Paperless process
The entire process involved in applying for a home loan is paperless. All you have to do is to scan and upload documents. Also, have in place an e-KYC system. This is probably one of the main advantages of the online application process.

Things to know before applying for a home loan in India

1. Understand eligibility: You will not get the loan approval unless you meet the eligibility criteria. This simply means that the lender will assess if you will be able to make EMI payments based on the salary that you take home. Ideally, you should not be spending more than 50% of your salary on an EMI. This is one of the most important factors that will be taken into account before a bank approves your loan. Remember that any additional perks or reimbursements that you get will not be considered to be a part of your salary. Another thing to keep in mind is the liability aspect. If you have other loans in hand, this also plays a role.
2. Decide on tenure and EMI carefully: The longer the tenure for your home loan, the more interest you will end up paying. This means the total cost of your loan increases. This is why it is important to choose a tenure wisely. Do not go for a longer tenure just because you want to pay a lesser EMI. For example, if you are taking a loan of Rs.10 lakh for 20 years at the rate of 9.55% per annum, the EMI you will be paying will work out to be Rs.9,353.99 per month. However, the total interest paid will be Rs.12,444,956. On the other hand, if you take a loan for the same amount and the interest rate for a lesser tenure, let’s say 15 years, the EMI per month will be Rs.10, 472.44. Though the EMI is slightly higher, the interest paid on the whole loan will come down to Rs.8,85,038. 
3. Choose the type of loan: There are two types of loans offered based on the type of interest rate that is charged. One is a fixed rate, where the interest rate remains fixed throughout the tenure of the loan. On the other hand, if you have a floating rate, the rate of interest fluctuates based on various market conditions. Fixed rates are higher than floating rates in most cases. So, if you go for a floating rate, the EMI you pay can increase or decrease based on the changes in market conditions. 
4. Compare interest rates: The first and most important thing to do before you apply for a home loan is to look around for interest rates. Under no circumstance should you go for the first lender that approaches you. Do some thorough research and shop around for the best rate. However, do not make this your only parameter. It is also wise to read up on the bank that is granting you the loan or speak to some existing lenders.
5. Read all the documents: A home loan approval application is a legal document that comes with certain important terms and conditions that you must be aware of. Be mindful of how your bank defines a ‘default in payment’. Scrutinise all the clauses that are offered and it also makes sense to consult a lawyer before signing any agreement in this regard.

Final words
If you are an old customer and have a long relationship with the bank, it is important to make  sure that you negotiate for a better interest rate. This especially holds true if you have all documents in place and a good credit score to add to it.

Steps To Manage Your Home Loan EMI

The home loan market has boomed in the last couple of years and it has allowed a lot more people to purchase a house. However, the flipside is that many home loan borrowers are having trouble with the EMIs. Usually, the monthly instalments that need to be paid are overwhelming to the borrower to the extent that their lifestyle has been compromised. And, since a home loan is a long-term investment, one must be wary about being unable to manage the EMI associated with it.

Mentioned below are some tips to help you manage your home loan EMI.

• Understand your monthly financial outflow – Prior to obtaining a home loan, understand the monthly outflow of cash that you need to set aside to pay off your EMI. There are several online home loan EMI calculators to help you determine this. Make use of these calculators to gauge if you are capable of repaying the loan. If the EMI exceeds 40 – 50% of your monthly income, it is a good idea to reconsider availing the loan. If you have other debts, reduce these debts from your monthly income and calculate 40 – 50% of this amount. If your home loan exceeds this amount, it is advisable to reconsider your home loan.
• Pay higher EMIs – Choosing a home loan with a higher EMI means that you will save on the total interest payable. This also helps you reduce the tenure on your home loan. However, one must keep the previous point in mind as well when opting for a loan with a higher EMI. One must not simply opt for a higher EMI if the current lifestyle is being compromised.
• Increase your EMI payments – Home loans are long-term investments, and during the tenure, an applicant’s income is bound to increase. Increasing your EMI as and when your income increases will help you save on the total interest payable and will reduce the tenure of the loan as well. This also applies to instances when a borrower receives a bonus or a lump sum amount. It makes sense to pay a part of it or the entire amount towards the home loan. This is because it helps you save on a substantial amount of the total interest payable.
• Transfer your home loan – If you have been paying off the home loan diligently for a while, you can request your bank to reduce the rate of interest. If the bank doesn’t oblige, you can choose to transfer your home loan to another bank. Most banks allow home loan balance transfers and this can help reduce the rate of interest and also modify the EMI. in this process.The new bank will pay off the home loan to your existing bank and all future EMIs will have to be paid to the new bank. However, it must be understood that after a while of paying back the home loan, you would primarily be paying back the principal and only a part of the interest. This means that you have paid off most of the interest on your home loan. It is, therefore, illogical to transfer your home loan after a certain point of the tenure of the home loan.
• Make prepayments – As mentioned earlier, make the effort to utilise any additional income you may receive to make partial prepayments toward the home loan. Although you may view it as losing out on a lump sum amount at once, you are actually saving on a lot of money by making prepayments. Usually, banks do not charge you on prepayments, and preclosure. Therefore, in order to save money, it is logical to make prepayments.
• Reassess your investments – If the total return on your investments is lesser than the total interest payable on your home loan, it is sensible to withdraw these investments to pay off the home loan. This is so because the marginal interest you avail from the investments will be overshadowed by the total interest you save by prepaying the home loan.

A home loan is a long-term commitment, therefore, it is important to make sure that you are financially capable of repaying this loan even before applying for it. Use online platforms that will help you assess the financial outflow you would have to incur to pay back the loan, and proceed cautiously. In case you are burdened by an existing home loan, follow the steps mentioned in this article and maintain financial discipline for a while. This will help you ease the EMI burden and will also help you pay off the home loan faster. Also consider refinancing your home loan to reduce the EMI you have to pay. However, this should be considered only after negotiating with your existing bank first.

How To Manage Home Loan EMIs

Home loans have become easier to obtain in the last few years, and this has also caused a lot of financial burden on borrowers. The expanding home loan market has increased defaulters as well. Being unable to pay off the EMIs efficiently has been a problem that needs to be addressed. Mentioned below are tips that can be followed to manage your home loan EMI better.

• Reduce the EMIs – The easiest way to reduce the burden of EMI is to negotiate with the bank to reduce the EMI you need to pay towards the loan. I many cases the bank will oblige due to the immense competition in the home loan market.
• Refinance your home loan – In case the bank doesn’t reduce the EMI, consider refinancing your home loan. Refinancing is a procedure that involves transferring your home loan balance from one bank to another. This may help you reduce the EMI on your home loan.
• Try to postpone your EMI – If you feel that your financial issue is only temporary, approach the bank to postpone the EMI payment. If you have been making the payments promptly, the bank is likely to oblige to your request.
• Make use of any additional income – Use any additional income that may receive, like bonuses, etc., to pay off your home loan. This will help reduce your EMI burden and also help you close your housing loan faster.
• Make use of EMI calculators – Before you avail a housing loan, understand the financial outflow you would need to incur on a monthly basis to pay it off. If you think that a loan would be too expensive for you, it would be a wise decision to not take it up. Make use of EMI calculators to help understand the monthly commitment you need to incur. Remember, the EMIs payable towards a home loan should not affect your lifestyle.
• Reassess your investments – If your ROI (Return on Investments) is lesser than the interest that you pay on your housing loan, it is advisable to withdraw these investments and prepay your home loan.

A home loan is a long term commitment, therefore, it is important to make sure that you are financially capably of repaying this loan before even applying for it. Use online platforms that will help you assess the financial outflow you would have to incur to pay back the loan, and proceed cautiously. In case you are burdened by an existing home loan, follow the steps mentioned in this article and maintain financial discipline for a while. This will help you ease the EMI burden and also will help you pay off the home loan faster. Also consider refinancing your home loan to reduce the EMI you have to pay. However, this should be considered only after negotiating with your existing bank first.