If you’re in the market to buy a new home or refinance your existing home, the crucial factor that you need to consider is your home loan interest rate. It determines how much you end up paying on your home loan, including the principal and interest repayment. As such, it’s essential to keep an eye on the interest rates and make an informed decision that aligns with your financial goals.
Our article will delve into the subject of home loan interest rates and how they impact potential homeowners. A leading online destination for home loan interest rates in India.
Understanding Home Loan Interest Rates
The interest rate on home loan is the annual cost that a borrower incurs to borrow money from a lender. It represents the percentage of the principal amount that the borrower will pay in addition to the amount borrowed. For instance, if you’ve taken out a home loan for INR 1 crore at an annual interest rate of 8%, your total interest expense over the loan tenure will be INR 77,29,017.
The home loan interest rate is the primary determinant of the overall cost of the loan. It’s also instrumental in deciding the EMI (Equated Monthly Installment) that a borrower will pay towards the loan repayment. In general, a lower interest rate means a lower monthly EMI and vice versa.
Factors Affecting Home Loan Interest Rates
Several factors impact home loan interest rates, and they can vary from one lender to another. Some of the crucial factors include:
Economic Factors: Economic conditions have a significant influence on home loan interest rates. For instance, during times of economic growth, interest rates tend to rise, while during a recession, they decline. This is mainly to balance inflation and encourage or discourage borrowing.
Credit Score: A borrower’s credit score is a crucial determinant of home loan interest rates. Lenders consider a good credit score as an indication of the borrower’s creditworthiness and ability to repay the loan. As such, if you have a higher credit score, you may qualify for a lower interest rate.
Loan Tenure: The loan tenure is the number of years over which the borrower repays the loan amount. A longer loan tenure usually means higher interest rates as there’s more risk associated with lending for a more extended period.
Type of Interest Rate: There are two types of home loan interest rates – fixed and floating. Fixed interest rates remain the same throughout the loan tenure, while floating rates fluctuate based on prevailing market conditions. Borrowers must bear in mind that fixed interest rates are generally higher than floating rates.
Discover Your Rate
Online platform that provides current home loan interest rates for various banks and non-banking institutions in India. The platform is an ideal tool for borrowers to compare different interest rates and make an informed decision.
The website features a simple and user-friendly interface that displays interest rates across institutions and products, including loans for self-employed individuals, salaried employees, and balance transfer facilities. You can filter the interest rates based on your loan amount, tenure, and type of interest rate.
Follow these simple steps:
Visit the website and choose the type of home loan that you’re interested in, i.e., purchase or balance transfer.
Enter your preferred loan amount, tenure, and type of interest rate (fixed or floating).
You’ll be redirected to a page that displays various interest rates based on your input parameters.
You’ll need to provide additional details on the platform to receive a personalized offer from Bajaj Finserv.
Once you’ve compared interest rates and made your choice, you can apply for home loan right from the platform.
Buying a home is an essential milestone in anyone’s life, and it’s a significant financial decision that requires careful consideration. Knowing your home loan interest rate is crucial to making an informed decision that aligns with your financial goals. While many factors determine interest rates, our article has highlighted some of the crucial ones you need to keep in mind. The platform allows you to compare rates from different lenders and choose the one that best suits your needs.