Thumb Rules to Factor In When Availing Aditya Birla Home Loan

Presently, Aditya Birla home loan interest rate or home loan interest rate offered by other lenders is an all-time low. Having a strong credit profile and high repayment capacity allows one to avail home loan at the lowest home loan interest rates.

However, before you opt for the Aditya Birla home loan or other home loan lender, there are some pivotal things that you should consider, which are:

* Approved home loan amount depends upon your eligibility like CIBIL score, income, and your existing liabilities.

* You require fixing on other parameters too, like property price, etc., that you are looking to purchase.

All home loans, including Aditya Birla home loan, require the longest financial commitment because one requires repaying the home loan EMI within 30 years. Repaying the home loan EMIs for such a long time can affect one’s finances, and hence they require being extremely careful when taking up the Aditya Birla home loan or home loan through other lenders.

To make this procedure of availing home loan simpler, here we have listed some of the crucial thumb rules that you​ ​should consider when availing Aditya Birla home loan or home loan through other lenders:

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Know your exact home purchase budget

Determining your home budget is one of the crucial thumb rules that you require to follow when opting for a home purchase. For doing so, you are required to analyse your overall affordability or repayment capacity and then determine your budget. Understanding your affordability helps you to avoid any financial linked problems in the future and also assists in keeping the finances on the right track. Thus, home loan applicants require finding their optimum home loan EMI accordingly before submitting their application for a home.

Note that the loan EMI for any credit option depends upon its rate of interest, loan EMI and loan repayment tenure. Higher home loan EMI resulted in shorter repayment tenure and reduced interest cost, while smaller home loan EMI leads to longer repayment tenure and higher interest cost. Home loan applicants can simply calculate their home loan EMI by using the online home loan EMI calculator and accordingly adjust their repayment tenure to figure out their optimum loan repayment tenure basis their repayment capacity. When figuring out your optimum home loan EMI, you should even consider your unavoidable home expenditures, health-related expenses, premiums, SIP contributions, rent, a monthly contribution that goes towards achieving your financial goals, etc. Applying for a home loan after knowing your optimum home loan EMI not just increases your chances of availing of home loan approval but also lowers your chances of home loan EMI defaults owing to unplanned aggressive payment schedules.

Adopt the 35/50 rule

When you apply for a home loan, home loan lenders, including Aditya Birla’s home loan, ask for your existing liabilities as well as your financial commitments, which involve stating your existing debts like a car loan, personal loan, loan against credit card etc. It is asked because the financial institutions usually do not lend the loan amount wherein the home loan EMI cannot be over 50 % to 60 % of your monthly income. However, it is always recommended to avail of home loans where your EMI for a home loan is not over 35 % of your monthly income and your overall home loan EMI involving all your existing loans is not over 50 % of your overall monthly income. Opting for this route can make you feel a little less burdened and will even enable you to easily save for your crucial financial goals. The ones going over the fixed limit set by the lender generally have lower chances of availing of home loan approval. Thus, those having loan repayment obligations going over 50 % of their monthly income should consider bringing their existing EMIs down by either prepaying or foreclosing some of their existing loans. They might even choose to avail a longer loan repayment tenure or make a higher down payment towards their home loan to reduce their overall EMI outgo, which in turn can help ameliorate their home loan approval chances.

A credit score is a crucial parameter to be checked.

A check on your credit score is one of the most important parameters that you require to factor in before applying for an Aditya Birla home loan or submitting an application with any other home loan lender. It is because, for those with an excellent credit score of 750 and above, it is extremely easy to be eligible for a home loan, while for the rest with a lower credit score, it is absolutely tough. Financial institutions like Aditya Birla home loan even provide lower Aditya Birla home loan interest rates to those with a strong credit score. It means that having an excellent credit profile assists in getting a good home loan deal from financial institutions. So, why shouldn’t you check it before submitting your application for a home loan? Those with poor credit scores should wait for some time and try and improve their credit score before submitting their application for a home loan. Doing so would not just boost their home loan approval chances but also ensure to avail home loans at lower interest rates.

Choose shorter repayment tenure.

Repaying your home loan for longer repayment tenure might lower your home loan EMI. However, it ends up making you pay more towards the interest component, which actually enhances your overall borrowing cost. It means though you opt for the longer repayment tenure to keep your EMI on a home loan lower, your overall interest burden rises. Thus, opt for the shortest tenure possible as per your repayment capacity to keep your interest cost on the home low.

Do not miss out on calculations.

Not just for home loans, conducting calculations and figuring out your estimated loan EMI is important for any credit option, may it be a car loan or personal loan. It is because doing the calculations not just assists you to know your affordability but also assists you in planning out your finances accordingly. Utilising the online home loan EMI calculators is one of the best mediums to do so.

Read more: Securing a Home Loan: Should You Work With A Mortgage Broker?