Things To Consider Before Choosing A Home Loan Interest Rate

A home loan is a long time financial commitment. One has to consider various things financially, before taking a home loan. One can pay bank a home loan by opting for easy EMI schemes offered by banks and NBFCs in India. EMI is formed by considering 3 important aspects of home loan: borrowed loan amount, tenure of the home loan and the interest rate applied on it.

When you take a home loan, you have to consider various things; interest rate is one of them. Before selecting an interest rate you should consider the following things…

Type of interest rate:

Banks and NBFCs in India offer two types of interest rates to its home loan customers: fixed interest rate and floating interest rate. When the home loan repayment starts, it starts with fixed interest rate. Where the customer is supposed to pay fixed EMIs every month. The interest rate does not fluctuate even though the market rates do. But after a certain amount of period, as decided by the loan lender, the borrower has to pay the floating interest rate. It is decided as per the changing conditions of the market. So when you take a home loan, plan your finances accordingly. Before signing the dotted line, know for much period you’ll be paying the fixed interest rate.

How much amount you’ll be paying as interest rate?

As interest rate amount is added in your EMI equally with your borrowed loan amount, it’s hard to define exactly how much of your EMI is being paid for interest rate. Here you can use a home loan EMI calculator. There are many benefits of using a home loan EMI calculator. It’s very easy to use a home loan EMI calculator. By using it you can determine exactly how much interest rate you’ll be paying throughout the tenure. So if you know that, you can choose the correct interest rate which will be easier on your wallet.

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