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Wednesday, 21 March 2018

Applying for a Home Loan- Look out for these Hurdles

Home Loans are one of the most sought after debt products offered by a bank or Non-Banking Financial Company (NBFC). This is because people need a home of their own at some point in time and to fulfill this need, a significant amount of money is required. For this, existing resources may not be sufficient for most people, and hence, a Home Loan stands to be the best option.

Lending institutions have certain eligibility criteria that will compulsorily have to be fulfilled to avail the loan. These criteria are unique for every lender and are a matter of the lending terms and policies. For most lenders, the process of availing the Home Loan is mentioned on the website or brochure and yet, a lot of people face difficulty in availing the loan.



Here are a few hurdles loan applicants are likely to face when opting for housing finance from a bank or an NBFC:

Deciding on a Loan Scheme and Lender
A Home Loan can be fixed or floating rate. For the fixed rate ones, the interest stays the same throughout the tenure. A floating rate Home Loan has a dynamic interest rate which changes as per the policies of the lender and market conditions.

Documentation Formalities
Banks and NBFCs have their requirements when it comes to documentation for the Home Loan. When the applicant is unable to provide the required documents, the loan application is likely to get rejected.

In addition to the two common hurdles mentioned above, there could be other challenges while applying for a Housing Loan such as processing fees and minimum credit requirements that can make it difficult for a loan applicant to avail the loan.

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