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Some Frequently Asked Questions

Things you should know before applying for a home loan

Make sure your credit score is good. Higher the score, the better.
Check if you can afford to pay monthly EMIs from your current income.
Research all the loan options available before finalizing an offer.
Choose a repayment tenure that’s convenient for you. Shorter tenure means higher EMI, and vice versa.
Know the prepayment terms of the loan and the charges applicable.
Ask the lender for all the additional charges that may apply to the loan.
Lastly, read all the documents carefully before signing.

What's the benefit of having a female co-applicant?

If you are applying for a home loan with a woman as a co-applicant, you can enjoy a concessional rate of interest on your loan. The interest rate in such cases are usually around 0.05% (5 basis points) lower than the standard rates.

To avail this benefit, make sure the woman co-applicant must be either the sole owner or a joint owner of the property.

What is Pradhan Mantri Awas Yojana?

Launched in 2015, Pradhan Mantri Awas Yojana (PMAY) is a Government of India’s initiative that aims to provide affordable housing for certain sections of the society. The scheme targets construction of about 20 million houses at an affordable price by 31 March 2022.

Here are some of the key objectives of this scheme:

To promote affordable housing for the weaker sections of the society.
To construct affordable houses in partnership with the public and private sectors.
To rehabilitate slums with the help of private developers.
To provide subsidies for beneficiary-led individual house construction.

Should I opt-in for Pre-EMI?

You should opt of Pre-EMI if:

If you wish to save money during the pre-EMI period and invest it in such a way that they get good returns on the amount saved.
If you wish to sell your property once the construction is complete.
If you are waiting for an income change and feel now it is not possible to afford a full EMI.

How does CIBIL score impact your interest rate?

Lenders use your CIBIL score as an indicator of how likely you are to repay the loan. The higher the score, the lower the interest rate you pay on your home loans.

Score below 600: A score below 600 generally indicates high risk. With such a score, it may be a little tough to secure a loan. If your score is below 600, it’s best if you try to improve the score before applying for a home loan.

Score between 600 and 749: Although it’s not considered a very good score but it gives you at least a chance to get the loan approved. Some lenders might approve your loan with this score after considering your income, your employment/business, etc.

Score of 750 and above: If your score is 750 or above, you are most likely to get your loan approved. Not only that, you are also most likely to secure the loan at an attractive rate of interest.

How can I improve my CIBIL score?

Here are some of the key factors that can help you improve your CIBIL score:

Pay your dues on time: You must pay all your dues on time, including your credit card bills as well as other loans you may have. Timely payments indicate your reliability when it comes to loan repayments.

Keep checking your credit report: At times, your score may get hit due to certain errors in your credit report. Keep an eye on the report and if there are any discrepancies, report to the credit bureau for correction.

Optimize the loan tenure: If you are taking a loan, try to choose a longer tenure. This will keep your EMIs low and ensure that you never default on repayments.

Maintain the right mix of loans: To have a right combination of secured and unsecured loans can also help improve your CIBIL score. Make sure you repay all the loans on time. This will help create a good credit history.

Avoid too many loans: You should not take on too many loans at the same time. Having too many loans may indicate high repayment risk. Additionally, if you fail to repay any of the loans, your credit score may get seriously impacted.

What are the hidden charges involved in home loans?

There are some hidden charges applicable while opting for a home loan.

Conversion Fees
MODT Charges (Memorandum of Deposit of Title Deed)
Document Retrieval Charges
Administrative Charges
Legal Fees
Valuation Fees / Inspection Fees
Documentation Charges
Switching Loan Package
Changing Loan Tenure
Statement of Account

Can i get 100% Home loan?

As per RBI guidelines, no lender is permitted to offer 100% home financing. You need to make a down payment amounting to 10-20% of the property’s purchase price. Typically, you can obtain up to 80% housing loan financing for your property.