The basic parameters that a bank manager considers before approving a loan are character or past financial transactions. They evaluate the credit rating of the borrower through independent agencies like CIBIL and CRISIL or through the bank’s own internal ratings based on financial information. In addition, they evaluate the borrower’s capital or creditworthiness. Finally, qualifications and experience are considered when approving a loan.
Which bank is best for a home loan?
It is better to go above SBI for HDFC.
SBI loots zero processing fees and many hidden charges, whereas HDFC 3000 charges processing fees but minimal hidden charges. My friend took a loan from HDFC and I took it from SBI. My credit score is much better than my friend’s.
Here is a comparison of apples to apples
SBI Bank: Mine
Processing charge-> 0
Mode-21200 Rs
Sales contract franking charge – Rs. 7850
Assessment charge – Rs
Legal charge – Rs
Documentation charge – 900 rupees
Fire insurance – Rs
They were pushing for term insurance, I somehow managed to escape.
SBI Total 55,450
Roi-> 6.05%
HDFC- my friend
Processing fee – 3000 rupees
Mod- 10200 rupees
Franking Sale Agreement -> 7850 rupees
Documents- Rs.650
Fire Insurance – Not Compulsory
Term Insurance – Not Compulsory
Special discount – 2500 refund
HDFC Total 18,500
Roi-> 7.8%
The project is approved by both banks. Thus SBI has deprived me. 0.5% interest rate could save me ~ 3000 / month interest.
SBI has delayed my loan after the sale agreement so that I do not go to another bank knowing the interest rate and charges.
Do not blindly follow the advice of borrowing from public sector banks
I will share my experience of taking a home loan from HDFC.
As soon as I finished my 1 year of work I decided to take out a home loan so that I could complete it as soon as possible the way I thought I could create an asset.
Since my salary account is HDFC I have chosen HDFC. But when I set foot in the HDFC Bank branch, they contacted me through an agent of HDFC Limited. So HDFC Bank Limited and HDFC Bank are two different places where we cannot compare the two services.
Initially they would point out all the documents and fortunately for me, the agent helped a lot to get the loan disbursed as soon as possible as the seller had set a condition to register within 1 month from the date of the contract.
But two imperfections I noticed.
One is that once the RBI changes the repo rate the interest rate will not change immediately but they change once a quarter which I think is a bit of loot. And the other is you can’t pre-pay online but you have to go to the home branch and pay there.
But what I have heard is that these two shortcomings have really helped SBI to choose a home loan from them.
In the near future, I plan to transfer my home loan from HDFC to SBI to enjoy the benefits.
So many of us take out a loan to buy a dream home because it is very difficult to buy a home from our savings, a fact that financial institutions understand very well.
It is very difficult to say that it is the best bank for a home loan because each institute has different terms, loan terms, age limits, additional charges, etc.
Here are some things to keep in mind when applying for a home loan.
Interest Rates: – Different interest rates are being offered for home loans and even you will see almost the same interest rates with private banks as with government banks. The interest rate usually depends on the risk that a bank takes on the borrower. Your credit score is very important and your deposit in the bank. Also provided documents. Sometimes attractive offers can be made for female applicants.
Extra Charges: – In addition to your EMI, there are some additional charges like processing fee, title clearance cost, mortgage, and any other charges for reduction of interest rate. You need to clarify all these issues to the bank executives.
Prepayment: – You must know the terms of prepayment. It helps you save interest.
Loan Term: – When choosing a lender you must know the term given by the lender.
Amount of loan eligibility: – How much home loan can be given based on the income of you and your co-applicants. In addition to this value of the property is important. There are many online tools available where you can write down your total income and payment time. This can help you verify your eligibility.
Options for loans: – An important point is that you should consider the options available in the market.
Prepaid Options: – Nowadays we pay our bills online, and manage our bank accounts online. So when choosing a bank you must check the options available for prepayment. Online prepayment makes it very convenient.
Disclaimer: My profit is not related to any financial institution. Through the following experience.
In my interactions with the banks, I found HDFC to be the best in almost all categories, or let’s say that’s what they’re supposed to do. Nothing more. Nothing less. They usually keep everything black and white and let the customer decide. Not in the case of others.
ICICI – Never reduced loan rate%. However, if the RBI raises the lending rate, it will increase it quickly.
SBI – I thought it was the worst. Lots of hidden charges + compulsory insurance. If I only knew about these before taking out a loan. They also have a 1-year lock-in period. In the case of declining rates, it is not good. Not worth doing. (I transferred my HL from ICICI to SBI and I regret every moment).
The best bank to get a home loan is the one that meets your needs considering your financial health.
For example, if your current liabilities are high, you should choose a bank that offers you low EMI. And if you start investing in real estate at a very young age, even before you start a family, you can You can focus on contributing more and moreYou can aim to close the loan as soon as possible.
However, the most important things you should keep in mind are interest rates, fees, and other hidden costs so that it is an easy decision for you.
Any bank with good documentation should be able to process your home loan quickly and provide all the details of hidden charges that should be suitable for getting a loan.
Stay away from private players like DHFL, and India Bulls.
HDFC is best in private spaces but the documentation and scrutiny are strict.
Personally, I have good experience with HDFC and LIC housing.
There are two main types of home loan institutions.
Bank
Housing Finance Institution (HFI)
Banks are directly regulated by the RBI. They are very fair in terms of home loans like interest rates and charges. They offer you an int rate base rate + a certain amount. For example, sbi base rate is 9.20
They offer 9.20 + 0.35 = 9.55% rate.
Here the base rate changes proportionally to some RBI rates, inflation, etc. 0.35 is a specific component.
Banks charge interest on daily depreciating balances. If you deposit an additional 100000 to you, the interest will be calculated if more than 1 lakh is deducted from the policy.
The Housing Finance Institution (HFI) is regulated by the National Housing Board. There is no government-owned entity. Even LIC Home, PNB HFL private firm. They have generous rules in debit processing. There the int rate calculation is a little different. Usually, they offer loans at a teaser rate initially the int rate will be lower. After 2-3 years they will be increased which will not be communicated at the time of receipt.
During this time many people usually go to government banks for takeover.
HFI also takes pre-closure charges.
But why do people go to HFI?
To save tax and stamp duty. Banks usually finance according to the sale agreement and the registered price/market price whichever is lower. Where HFI financing is based on market value only.
SBI int rate is the lowest in the market. You can also get the best service if you contact a young manager in a branch.
Note: The above exercises are most commonly used. Some banks / HFIs may have different strategies.
It’s great that you’ve decided to build a new home and you plan to take out a home loan.
Building a home not only creates an asset for you but also helps you plan your tax if you are going to take out a home loan on the property.
Choosing a bank for the home can be difficult at present as all banks claim to have the best processes and services
The following points should be compared before taking any home loan:
Interest Rate: In the end ROI is the most important part but many banks fool the customers and claim the best ROI in the early years then increase the rate. Choose a bank that has transparent and good and consistent ROI. Nowadays banks have MCLR linked ROI, which will be reset every year. Don’t be tempted by the low ROI in the early years. Think long-term.
Pre-Payment Charge: Choose a bank with a zero / minute charge. You will notice that your salary will increase as the years go by and you will be in a position to repay the loan. PSB has zero prepayment charges which are good for salaried / business class.
Processing Charges: High processing fees are a hindrance for many customers. Many banks still offer discounts during campaigns or festivals.
TAT: Turning time is also a key issue. Minimal paperwork and quick approval of loans are very important.
From my experience, I have seen PSB and private banks as well as NBFCs have their own good and bad points. Do proper research and compare with the above parameters before finalizing the loan.
Is this HDFC Limited which is the best at this stage??
Banks deal with base rate plus spread fundamentals, while NBFCs deal with prime lending rate minus spreads. If you apply for HL through a bank, the spread will be positive while an NBFC will give a negative spread. Historically the highest spread is being offered by HDFC Limited. Since the implementation of the base rate formula, banks have been working in sync without too much change.
This means that in the future, HDFC will have to rearrange their PLRs and spreads, but this will be to the advantage of existing HL clients because spreads cannot go too high (eg PLR: 16.56, spreads: -77, effective rate – 9.5% ) Now, the PLR will change but the spread will shrink (eg PLR: 16.25, spread: -6.75, effective rate: 9.5). So it will benefit the existing client as the spread is locked in and the rate will be revised to 9.25.
Also conversion flat Rs. 5000 / – to .25% arrears.
Another feature is that in the case of fluctuating rates, the rates are revised on a quarterly basis on the basis of individual accounts. This means that instead of imposing complex multiple rates on the account, the client has transparency and stability
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