6 Factors Affecting your Housing Loan Rate

6 Important Factors which Affect your Housing Loan Interest Rate

What is Housing Loan ?

Housing loan is one such facility that can be used by any person to build the home of their dreams. Bajaj Housing Finance offers reasonable interest rate and better amount that Borrower may pay in installment. Before applying for the loan, the borrower should be fully aware of the terms and conditions of availing the loan the borrower can choose the time period to repay loan.

Factors that Affect your Housing Loan Interest Rate If the borrower is unable to repay the loan due to any reason in such a situation, the lender confiscate the property that borrower allows during the loan process.

The loan value ratio is greatly valued by the lenders, commercial banks, non-banking financial companies because it plays a vital role in home loan eligibility. If the loan ratio is low than the chances of loan approved is high and lower the interest rate.

What is Credit Score?

The credit score tells about the loan repayment of the borrower, a borrower's credit score is good when he makes loan repayments on time. If the borrower does not make the repayment on time, then his credit score goes down. A credit score is a number that is determined by the lender and financial institution. A person’s credit score is usually expressed as three digit number between 300-900 based on their individual history and more.

What is Duration of Loan?

Duration of loan is the period which on drawdown of a loan and expiring the date on which the loan is repaid on full. Loan tenure means that the borrower who is taking the loan and how much time he wants to repay that loan, the higher the loan repayment tenure the lower the interest rate, the shorter the loan tenure the higher the interest rate. It is a secured home loan which provide affordable interest rate, based on low risk potential.

Let’s know About Location and Home Value

Value of property is indirectly proportional to the interest rate, like when the property rate is higher then the rate of interest of property is lower. When property has high resale value it attracts low interest rate. The property value depends also in the area where it is, when the property is near the highway, landmarks and roadways than value of property become increased.

Types of Interest Rate The Housing loan interest rate is the amount of a lender charges a borrower and is a percentage of a principal - the amount loaned. In additional, it is a low risk irrespective of the duration of the loan.

There are various types of interest rate, some are as follows:● ● ● ●

Fixed Interest Variable Interest Simple Interest Compound Interest

Talk About Marginal Costs of Funds Based Lending Rate Marginal Costs of Funds Based Lending Rate (MCLR) refers to the minimum interest rate below which financial institutions can’t lend, except in certain cases. Marginal Costs of Funds Based Lending Rate means the rate determined internally by the bank depending on the period left for the repayment of a loan.

More Info:BAJAJ HOUSING FINANCE LIMITED Cerebrum IT Park, 5th Floor B2 Building, Holy Cross Rd, Kalyani Nagar, Pune, Maharashtra 411014 Phone number : +91 8698010101 Email id: bhflwecare@bajajfinserv.in

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