Nov
24
Buying a home is everybody’s dream but it’s not easy to have one and that too at a time when property prices are soaring high. But one need not worry about this fact as long as banks and financial institutions are there to fund for your purchase. There are various kinds of loans that are available in the market but the very term ‘loan’ creates a certain degree of doubt in the minds of people borrowing it.
In India people taking a loan were always looked down upon but this picture has changed in today’s time. The whole concept of loans has undergone a radical change since the early 1990’s, the period following renaissance. In early 1990’s there was an incoming of moneylenders from across the globe. These lending authorities brought down the rate of interest to such a low level so that it could be easy for a common person to avail a loan.
Home loan is availed by borrowers to either purchase a home, reconstruct it or to renovate it. These loans are available in two categories- secured and unsecured. If a loan is taken under the secured home loan category then the borrower needs to place his home as a security with the lender. The interest rate charged under this category is therefore low because the risk factor is low in this case due to the involvement of asset as a security. On the other hand unsecured home loan can be availed without keeping a security with the lender. But the borrower needs to compensate for this by paying a higher rate of interest. Since there is a greater degree of risk involvement in this case, the interest rate is higher.
These loans are available at affordable interest rate by most banks in India. Banks are offering a facility of easy EMI- Equated Monthly Installments to repay these loans. Banks calculate the EMI after tracing down the borrower’s monthly expenses. This is done in order to make the repayment easy for the borrower.
One needs to keep the following things on mind in order to avail a home loan of any of the above two category:
- The borrower should be minimum 18 years of age.
- The borrower should posses a permanent residential proof like PAN card, voter ID card.
- A bank statement is a must for the person who wants to avail any of these loans.
In today’s era home loans are considered to be the best option for buying any real estate property. Purchasing a property with your bank balance is tough for any person in this country and hence home loans are gaining popularity with time. One can always rely down on home loans to make his/her dream come true.
Vaibhav Aggarwal is an expert Auther on RupeeTimes who writes about personal finance related terms like education loan, home loan, credit cards and fixed deposit.
November 24, 2008
Comments
Leave a Reply
Syndicate
Bookmark
