Benefits of Applying Online
When Banks Compete, you win.
Apply for a Home Loan at ApnaPaisa and we will match your requirements with the best offers from our network of over 400 service providers. We will get a maximum of five providers to compete for your business. WHEN BANKS COMPETE YOU WIN. You can then decide which home loan is best for you based on:
- Lowest Interest Rate
- Lowest EMI
- No Pre-payment charges
- Lowest Processing Fees
- Maximum Eligible Loan Amount
- Mandatory Documents Required
- Lowest Processing Fees
Or any other factor that is important to you.
Negotiating Tips
1) If you have a good credit record and your income is sufficient to justify the loan you can negotiate on interest rates. You can also try and get Processing fees or legal or valuation fees reduced or completely waived.
2) If you go for a floating rate loan then pre-payment charges are not payable.
3) When interest rates are high and are expected to go down you should go in for a floating rate loan as it makes no sense to lock into high fixed rates or the so called Dual rate loans where rates remain fixed for a couple of years before shifting to regular floating rate loans. Please review this decision at least once every 6 months
4) Take term insurance and critical illness and accidental disability policy for the full loan amount to make sure you or your loved ones don't have to worry about loan repayment should you die or are disabled due to a critical illness or accident. You cannot be forced to buy this policy from the insurance company chosen by the lender - you should choose your own insurer.
Tax implications on Home-Savers
Tax implications on Home-SaversApnaloan.com Research Bureau
10 Aug 2007
I want to take home loan of Rs.18 lacs and I have around Rs.7 lacs in my account. I have 3 options with me which are detailed below:
Option 1: I can use my personal savings towards buying the property and take a normal home loan of Rs.11 lacs at an interest rate of 9.50% for the balance.
Option 2: Take a loan of Rs.18 lacsat an interest rate of 9.50% and keep my personal savings in a fixed deposit where I get an interest rate of 7%.
Option 3: Should I opt for the Home Saver or Home Credit or Smart Home scheme and take a loan of Rs.18 lacsat an interest rate of 10% and keep the Rs.7 lacs in the linked current account?
Which option should I select?
You are referring to a very innovative scheme (Home-saver) that has come in the market recently. The interest rate charged on this scheme tends to be 0.50% p.a. more than the rate charged by the same bank for a regular home loan for the same tenure. A good rule of the thumb to check whether this is beneficial or not can be as follows:
Step 1: Calculate the additional amount that you are paying on the home loan due to the higher interest rate. This works out to Rs.9, 000 (0.50% of the home loan of Rs.18 lacs)
Step 2: Work out the additional interest you pay on the loan taken even on your savings portion. This works out to 3% (i.e. 10% interest on your home loan less 7% available on your fixed deposit)
Step 3:Calculate the amount of deposit you will need to earn the amount worked out in Step 1 at the rate worked out in Step 2. This is Rs.3,00,000 (3% of Rs.3,00,000 is Rs.9,000).
Step 4:Compare this amount with the average deposit you are likely to keep in the linked account. In your case since the likely deposit is Rs.7,00,000 this scheme is beneficial for you.
This calculation is for the first year of the loan and ignores the tax differentials and possible changes in the interest rate that can occur over the long tenure of a home loan. This calculation should be treated as a rough indicator of the benefits of this scheme.
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