Loan lenders charge a heavy interest rate on housing loans. However, a small amount of research can surely help you locate a lender who charges a slightly lower interest rate than the others. The difference may not be a massive one, but can definitely add up to your savings. With that being said, can you still expect an interest rate lower than what is currently being charged? Of course, you can. Here’s how.
Improve your credit score Loan lenders charge a heavy interest rate on housing loans. However, a small amount of research can surely help you locate a lender who charges a slightly lower interest rate than the others. The difference may not be a massive one but can add up to your savings. With that being said, can you still expect an interest rate lower than what is currently being charged? Of course, you can. Here’s how.
Improve your credit score
By further raising your credit score, you gain the trust of the lender. Make all your payments on time. Try paying major parts of your debts in case you have any. Excellent credit score guarantees your ability to pay back the loan EMIs on time. So, if requested, the lender may consider lowering the existing housing loan interest rate to some extent. Also, if you have already opted for the loan, the lender may lower the rate on the remaining amount if an improvement is sensed in your credit score.
Determine your Debt to income ratio
When offering you a loan, lenders are usually interested in two major factors – (1) The total amount you earn (2) The debt you own. The more you earn and the less debt you own means you most likely have a chance of getting a better interest rate on the loan amount.
Best interest rates doesn’t always mean the best
‘Get a home loan of up to 50 lakhs at the lowest interest rate.’ This advertising statement may sound quite enticing, and no doubt, it may be genuine. But, it is recommended that you make a good amount of research before you fall for such advertisements and sign the application form. Although ads like these aren’t meant to be misguiding, the related scheme may come with a bundle of few additional charges. So, research and then take a step ahead.
Online comparison can get you the best rate
Several websites can help you find the best home loan schemes with highly affordable interest rates. You get to compare the best rates offered by hundreds of loan lenders. It is advisable to make a list of at least 4 to 5 lenders that offer the lowest rates. Get in touch with each of them to get detailed information about their offerings. You can then make the final selection based on the information you have received.
Recommendations do matter
In case you have not opted for a home loan before, things may seem a bit tedious. Although online comparison may leave you with a few good options, you may be a bit sceptical in taking the final step due to the fear of going wrong. In such cases, personal recommendations turn out to be a great source of assistance. You are sure to come across friends and family members who have, in the past, availed a home loan. Approach them and find out about their personal experience. If lucky, you may end up with a list of lenders who happen to offer the best interest rates.