The ease of availing a home loan and the vast availability of lenders offering competitive housing loan interest rates in India, make housing finance a go-to option when buying a property. The interest rate your bank charges on a home loan in Delhi NCR is your cost of credit. Interest rates determine the cost of borrowing money from banks and financial institutions. Lenders consider several factors while setting interest rates. However, when seeking a home loan or looking to refinance a home purchase, you need to know the factors that could affect your home loan in Delhi interest rate.
• Your credit score -Your credit score has a significant impact on the interest rate that you have to pay. It is a measure of your creditworthiness and impacts the lender’s faith in your ability to repay a loan. While a poor score can cause the lender to charge you a higher rate of interest, a high score gives you the upper hand. As a result, you have some breathing room to negotiate and bring down the rate of interest.
• Changes in the Monetary Policy – in India, the Reserve Bank of India’s financial strategy seeks economic growth and stability. Thus, the RBI controls the monetary policies such as money supply, liquidity, and interest rates through benchmark rates, such as the repo rate and reverse repo rate, cash reserve ratio (CRR) and statutory liquidity ratio (SLR).
• Economic Uncertainty – If the economic growth of an economy is unpredictable, lenders tend to demand higher interest rates from borrowers as security for the higher default risks associated. Thus, home loan interest rates rise at times of uncertainty.
• The location and value of your home – The location plays a significant part in determining the value of your home. For example, a home with excellent amenities in the vicinity like shopping centers, grocery stores, bus stops, railway stations, banks, hospitals, and schools is likely to have a higher value than a home with poor amenities and connectivity. If you choose a home in a location with poor amenities, it reduces the value of the home in the eyes of the lender, as resale will be difficult. The same applies to the age of the property. Newer properties are more lucrative as they are considered to be more stable. So, if the property you are buying is old and not in an upcoming neighborhood, you will have to pay a higher rate of interest, and vice-versa.
Loan Kumar is such a financial institution that helps us in availing various types of loans such as home loans, personal loans, business loans, loan against property. It is committed towards its client to provide them with the best service. Loan Kumar has ties with all the leading banks and other financial institutions that ensure a hassle-free loan approval to its applicants.