January 11, 2018 No Comment. Posted in Financial Literacy

It can be any loan product which you need. Exploring the market and choosing the right fair deal for you will always be a smarter choice. It’s not only that you have to find the right product that suits your need but also the terms to be compared. Before calling a loan officer always keep your notes handy so that you can discuss the important points and compare the terms provided by different lenders. Surely, when you will be meeting with few of them you will be able to understand the buzz words and the different terms used in different available loans.

Research on available options

This can be an important decision to understand whether to choose from a fixed rate or a floating rate of interest. Mortgages or home loans with a fixed rate are mostly preferable as the rate of interest is fixed for the life of the loan. Choosing a floating rate completely depends on your judgment of increasing your income in future. You have to be specific and compare the terms with different lenders for the same type of loan. you can easily compare the available rates by just providing few details about you and your needs. It is important to keep in mind that these interest rate may vary depending on your credit score and repayment history.

Processing fee

The processing fee is being charged by every lender but the amount or the percentage varies from one Bank/ NBFC to another. Though few buyers agree to pay an additional fee to get a lower rate of interest and avail a long term benefit by paying lesser amount as a repayment.

Life of Loan

Compare the maturity period or the repayment period of your loan. The repayment period of secured loans like home loan or mortgage varies from 15-20 years but with a shorter time period you will pay lesser amount as an interest turning your monthly payments to be higher. Fist time buyers generally opt for a longer term to get lowest EMI’s to reduce a sudden monthly installment burden.

Extra need of amount

Lenders / financial institutions count on the extra amount that you will need to pay property taxes and insurance in your monthly payment. The borrower is free to ask the lender and compare the agreed amount you pay each month.

Processing time

The processing time is generally from 7 to 10 working days and completely depend on the completion of the documents. The approval for the case varies from case to case and can be compared with different lenders for the same case and product of the loan.

Prepayment Charges

The prepayment charge is a extra amount being charged by the lender for paying off the loan before the due date. The loan generally has lower interest rates as compared to the loans which do not have the prepayment charges.

Closing cost

The borrower has to be specific to know the costs associated with the loan like the processing fee, credit report fee, appraisal fee, title search and title insurance. The actual cost of the loan can be calculated by adding all the associated costs along with the interest and the principal. The closing cost is also associated with the loan cost and varies from lender to lender. This fee can be negotiated based on the terms and conditions agreed between you and the lender.

Read the fine print

The fine prints differ from one lender to another that specifies the fees and interest rates involved in borrowing from that lender. Before making any decision or singing any agreement with any of the lender, it’s better to compare, discuss and understand everything with the sales and credit officer of that organization.

Finding the interest rates available from multiple lenders without filling multiple forms gives the borrower the accurate information. This in turn helps to take an informed and a firm decision. Mudra Homes provides you credible information of the market with competitive, personalized loan offers from multiple and already evaluated lenders.

 

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