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If you have never availed a loan, you are likely to get overwhelmed with the various aspects of a home loan. This loan offering helps you buy your dream house without draining your savings. However, there are multiple things to consider when applying for it. Naturally, there might be some questions that you seek answers to when applying for a home loan.
Here are some commonly asked questions answered below.
Typically, you can avail a home loan for a maximum of 20 years. The tenure can significantly affect your Equated Monthly Instalments (EMIs) and finances. A long tenure would reduce EMIs but would increase your interest outgo and thus the total cost of borrowing. Similarly, if you choose a short tenure, you could face a cash crunch while managing your everyday finances due to a high EMI, although it would help close your loan faster.
You must choose a home loan after meticulous research and comparison. Look for a lender that offers low home loan interest rates and flexible tenure. You must also check if they have an online interface for home loan application and provide doorstep service. Also, consider the processing fees and the documentation process. Lastly, ensure that the lender has a low turnaround time for home loan approval and disbursement.
Yes, you can prepay a home loan before the end of the tenure. It helps you save on interest outgo. As per the Reserve Bank of India's (RBI) guidelines, lenders cannot charge a prepayment fee on home loans with floating interest rates.
Yes, you can borrow a home loan with a co-applicant. It is called a joint home loan.
You can avail a joint home loan with your parents, siblings or spouse. However, a minor or a friend/acquaintance cannot be a co-applicant.
If you do not pay EMIs for three months, the bank will send you a reminder and charge you a penal interest or penalty fee. However, if you do not pay your home loan EMI even after 90 days from the payment of the last EMI, the lender can initiate the liquidation of your property through an auction under the legal framework of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI).
Yes, you can transfer your home loan. This facility is called a home loan balance transfer. In balance transfer, you foreclose the existing loan and pay the remaining EMIs to the new lender. You can transfer your loan to a new lender to get lower interest rates or better features and deals on your home loan.
Before you avail a home loan, it is advisable to clear all your doubts and ask as many questions as you can. Knowing everything about home loans is crucial, especially when availing one for the first time. Moreover, you can always contact the lender to resolve your queries. Head over to the Kotak Mahindra Bank website and apply for home loan today.
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