Buying a property in India is by no means a small feat. A home loan is an effective way help you with this. Over the years, RBI and NHB have made sure borrowers and lenders are protected in the equation.
If you have shortlisted your property, you will find the next step is to find a bank or institution that suits your requirements. The bank should also be willing to take you on as a customer. There are so many home loan providers these days that you could easily get overwhelmed.
Lets take a look at some important factors that will help you choose the best bank for your home loan.
Your credit history & eligibility
There are two kinds of institution that offer home loans:
Housing finance companies (HFC)
Most banks follow conservative ratios to assess a borrower. This means, most banks are very strict in choosing their home loan customer. They will look at your property, your income and your past repayment track record to decide whether or not to lend.
HFCs also look at your property, income and past record, but the framework is slightly more flexible.
For example, if you have a case of cheque bounce in the past 12 month, you may not be able to apply for a home loan at a bank regardless of your CIBIL score. However, an HFC may accept your case.
HFCs are also slightly more lenient when it comes to calculating loan eligibility and loan value. They are flexible about which components can be included to show a higher income and higher property value.
You can choose either HFC or a bank for your home loan depending on your requirement. But you should remember that benefits come at a higher cost.