Thursday 11 September 2014

Getting Home Loans Online In India

You may be ready to take a loan to fund your dreams for a new home. But the challenge you now face is in getting the loan at the right price, from the right lender with all the right benefits. Given that there are so many lenders out there wooing customers with attractive features on its home loan products it can be quite confusing for a lay person to cover all bases and make the right decision as to which home loan to opt for.



Most people do the age-old exercise of asking friends and family about home loans available in the market and their views or experiences with different lenders, then going down in person to the shortlisted lenders and finding out more about the loans available. They then return home, collate all the required information and documentation and take it back in person to the lender for perusal and review. The applicant then waits to hear whether or not his/her loan has been approved or rejected.

This may be great for the generations of yore who didn’t have the benefit of technology to help get everything done from one place i.e. the comfort of their homes. Lenders have long since embraced technology and established portals through which potential borrowers can browse their loan offerings and the eligibility and documentation requirements. They even go one step further by allowing users of their websites to apply for their loans online, home loans included. All required details for a complete loan application would have to be keyed in by the applicant and the processing begins thereafter. What’s more, applicant’s can subsequently track the status of their loan application through the lender’s website by keying in details from their application.



For e.g. if you were to log into ICICI Bank’s website and navigate to ‘Home Loans’ from under the ‘Products’ tab, you would immediately see an icon that says ‘Apply Online’. By clicking on this icon you are redirected to a page that first determines your eligibility for the home loan by asking you to fill in details relating to the city where your property is, the reason for the loan, the city you currently reside in, your date of birth, and your employment type. You also have the option here of including a co-applicant’s income. You can then get a quote by filling up your name and contact details followed by the loan amount and tenor that you are looking at. Once you decide to apply you can go ahead to the following pages to fill in the loan application.

The process is similar to most lenders and is a very convenient way to apply for a home loan. It saves time and travel and you also get all information regarding the home loan schemes with their details, terms and conditions at one place. It is particularly useful for those who do not have easy physical access to banks/institutions.

While this may be a useful way to apply for a home loan from an individual lender there is still the issue of comparing loan products across different lenders. It can still be confusing and time -consuming for an individual to browse the websites of all lenders in the market and make a comparison based on calculations as to whose offer is the best. There may be lenders you aren’t even aware of much less decide to go to their website.



To overcome this, many financial sites have collated information about lenders and their home loan products into one website. Bank Bazaar is one such company that provides comprehensive information about loan products. By visiting bankbazaar, users can not only get individual lender’s home loan product information but can also easily calculate maturity values, EMIs etc using their online financial tools. They also provide for easy comparison of loans. Users can then apply for loans through this website for the selected lender and obtain great deals that they would not otherwise have got by visiting the bank/financial institution themselves. This is because of Bank Bazaar’s tie-up with various lenders to avail of great rates/benefits to those applying for home loans through its site. Besides the ease of use in applying for your home loan, you can also browse through various user reviews that give you valuable information on their experience with various lenders. Bank Bazaar also has a repository of information on home loans that users can make use of to understand the product and market better.


The ease of applying for home loans online in India will only get more popular as more borrowers begin to trust this mode of dealing with lenders. Besides home loans, various other loans can also be applied for in the above mentioned ways. It would be prudent for all users, though, to do their homework before applying online so as to not sustain a fallout from lack of information or understanding. 

Monday 8 September 2014

Home Loans: Common Mistakes Borrowers Make

There are some common mistakes borrowers make while opting for a home loan. They are listed below:

Home Before Loan
Home buyers tend to first look for a house or property and then go about trying to get a loan. Ideally, one should consider the loan amount that they will be eligible for then assess their finances accordingly to determine a feasible budget for a new house/property.


Poor Creditworthiness
All leading banks and financial institutions assess the creditworthiness of their customers before approving their loans. Many borrowers are not aware of this and are surprised when they find they have been rejected due to poor credit. An individual can get their credit score/report from providers like CIBIL and check their credit standing. In case of a poor score, the borrower can build their credit rating over a couple years and apply for a loan again at a later date.

Not Negotiating:
Many borrowers take a lender’s loan offer at face value. They do not realise that they can get a better deal by negotiating with the lender on a variety of the terms outlined in the loan offer including interest rates, loan amounts, tenor etc. Those with a good credit-standing can bargain for better rates.

Inadequate Research:
There are number of lenders offering home loan products, each one differing in terms of their offerings to meet the varied funding needs of borrowers. However, a lot of borrowers do not bother to study their options and miss out on good offers. They also do not find out about the lender’s reputation or service.

Incorrect Budgeting:
When home buyers take a home loan, they often only assess their finances to cover for loan repayments and do not factor in other expenses that may arise for which they will need to have savings. For e.g. buying a new car or relocating or education expenses or even medical emergencies. A home loan should be affordable after ascertaining all possible personal financing requirements.

Marketing Gimmicks
Many lenders offer attractive rates as part of their marketing strategy to woo customers. Borrowers fail to study the terms and conditions under such offers and opt for these loans thinking they have got a good deal. They later realise the product doesn’t suit them.

Timing Interest Rates
Trying to time the market for lower interest rates is difficult and many borrowers miss out on a good deal by waiting too long for a more attractive loan.

Home Loan costs:
To most people, loans are looked at in terms of their interest costs but they fail to factor in other charges like processing fees,administration fees etc. which add to the cost of the loan.

Unforeseen circumstances:
Most borrowers do not realise the importance of being able to pay off their home loans, which is a huge debt to satisfy, in the event of untimely circumstances e.g. death. Insuring one’s home loan can help meet repayment commitments in such events.

Inadequate funds:
Obtaining a loan may be possible for a lot of borrowers but they do not account for the fact that lenders do not cover the entire amount due for the property. The down payment is usually borne by the borrower prior to receiving the loan amount and not having adequate funds for this purpose can cause a major glitch in the homeloan process.




Avoiding these common mistakes will ensure a smoother and more satisfactory experience when availing home loans.