{"id":186279,"date":"2023-12-01T04:41:21","date_gmt":"2023-12-01T04:41:21","guid":{"rendered":"https:\/\/indiansapidnews.com\/?p=186279"},"modified":"2023-12-01T04:41:21","modified_gmt":"2023-12-01T04:41:21","slug":"be-careful-about-festival-loan-offers","status":"publish","type":"post","link":"https:\/\/indiansapidnews.com\/celebrity\/be-careful-about-festival-loan-offers\/","title":{"rendered":"Be Careful About Festival Loan Offers"},"content":{"rendered":"<p><strong>&#8216;Look not just at the interest rate but also the processing fee.&#8217;<\/strong><\/p>\n<p>This festival season most offers on home loans fall under one of two categories: Reduction in interest rate and waiver (partial or complete) of processing fee.<\/p>\n<p>While offers are important, borrowers must heed the other terms and conditions the loan comes with.<\/p>\n<p>Stiff criteria for best offers<\/p>\n<p>The best festival offers are not open to everyone. You can avail of them if you fulfil a number of terms and conditions.<\/p>\n<p>Banks and housing finance companies (HFCs) often set cut-off credit scores.<\/p>\n<p>&#8220;SBI&#8217;s special campaign rates for the festival season can only be availed by applicants having credit scores of 700 and above and to new-to-credit applicants. Similarly, HDFC Bank has set a minimum cut-off credit score of 800 for availing its home loan festival offer,&#8221; says Ratan Chaudhary, business head, home loans, Paisabazaar.<\/p>\n<p>&#8220;Applicants not having these qualifying credit scores would be charged regular home loan rates,&#8221; Chaudhary adds.<\/p>\n<p>Several other criteria may apply.<\/p>\n<p>&#8220;Many of the lowest interest offers may be for women borrowers, for those borrowing for a shorter tenure (say, 15 years), or availing a smaller amount (say, Rs 30 lakh or less),&#8221; says Adhil Shetty, CEO, Bankbazaar.<\/p>\n<p>Borrowers who have found a house they like at a price they can afford should try to make the most of these offers.<\/p>\n<p>&#8220;When buying a house, people end up spending their entire savings. Any money they can save through these offers will come as a relief,&#8221; says Rishi Mehra, CEO, Wishfin.<\/p>\n<p>He suggests checking that what is given to you as an offer is not taken away under some other head.<\/p>\n<ul>\n<li><strong>QUESTIONS ABOUT MONEY? ASK rediffGURUS!<\/strong><\/li>\n<\/ul>\n<p><strong>Points to check<\/strong><\/p>\n<p>Borrowers must consider a number of other factors while choosing a lender.<\/p>\n<p><strong>Total loan cost<\/strong>: &#8220;Look not just at the interest rate but also the processing fee,&#8221; says Shetty.<\/p>\n<p>Use an EMI calculator to compare the overall cost of borrowing.<\/p>\n<p>&#8220;First, calculate the cost for the players with whom you maintain your deposit accounts, credit card accounts, or existing loan accounts.<\/p>\n<p>&#8220;Then visit online financial marketplaces to compare the home loan rates and fees offered by other lenders,&#8221; says Chaudhary.<\/p>\n<p><strong>Check the spread<\/strong>: Borrowers have reduced the spread (the interest rate charged over and above the repo rate) from 300-350 basis points before the pandemic to as low as 190 basis points now.<\/p>\n<p>&#8220;Check whether you are getting the best spread you are eligible for. Also, understand the clauses around it &#8212; whether the lender can change the spread at will or only under specific conditions, such as a deterioration in the borrower&#8217;s credit score,&#8221; says Shetty.<\/p>\n<p><strong>Loan amount eligibility<\/strong>: Mehra emphasises going with the lender that is willing to give you the amount you require.<\/p>\n<p>Suppose that you require Rs 1 crore. One bank is willing to offer you Rs 75 lakh at 8.5 per cent and another is willing to offer you Rs 85 lakh at 8.7 per cent.<\/p>\n<p>You have only Rs 15 lakh to give as down payment.<\/p>\n<p>You will have no alternative but to go with the lender offering the higher amount (despite the higher rate) if you don&#8217;t want to miss out on the house you are keen to buy.<\/p>\n<p><strong>Prepayment conditions<\/strong>: Most borrowers pay off their home loans in 8 to 10 years, hence the terms and conditions around prepayment are crucial.<\/p>\n<p>Some lenders may allow you to pay a small extra amount, say, Rs 2,000 each month over and above your EMI. This makes prepayment easy.<\/p>\n<p>Some, however, may insist that the prepayment should be a large lump sum amount equal to, say, three EMIs. Others may allow only a fixed number of prepayments in a year.<\/p>\n<p>&#8220;If the frequency allowed is low, or the minimum amount you can prepay is high, prepayment becomes more difficult,&#8221; says Shetty.<\/p>\n<p><strong>Loan tenure<\/strong>: Mehra suggests paying heed to the tenure as it determines the EMI.<\/p>\n<p>A longer tenure reduces the EMI and makes the monthly burden easier to bear.<\/p>\n<p>A longer tenure, however, results in a higher interest cost, so a balance needs to be struck.<\/p>\n<p><img decoding=\"async\" class=\"aligncenter\" src=\"\/\/im.rediff.com\/getahead\/2023\/nov\/30loans2.jpg?w=670&#038;h=900\"><\/p>\n<p><strong><em>Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities\/schemes or any other financial products\/investment products mentioned in this article to influence the opinion or behaviour of the investors\/recipients.<\/em><\/strong><\/p>\n<p><strong><em>Any use of the information\/any investment and investment related decisions of the investors\/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.<\/em><\/strong><\/p>\n<ul>\n<li><strong>MONEY TIPS<\/strong><\/li>\n<\/ul>\n<p><strong>Feature Presentation: Ashish Narsale\/<em>Rediff.com<\/em><\/strong><\/p>\n<p>Source: <a href=\"https:\/\/www.rediff.com\/getahead\/report\/be-careful-about-festival-loan-offers\/20231201.htm\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8216;Look not just at the interest rate but also the processing fee.&#8217; This festival season most offers on home loans fall under one of two categories: Reduction in interest rate and waiver (partial or complete) of processing fee. While offers&#8230;<\/p>\n","protected":false},"author":2,"featured_media":186278,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Be Careful About Festival Loan Offers - Indiansapidnews.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/indiansapidnews.com\/celebrity\/be-careful-about-festival-loan-offers\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Be Careful About Festival Loan Offers - Indiansapidnews.com\" \/>\n<meta property=\"og:description\" content=\"&#8216;Look not just at the interest rate but also the processing fee.&#8217; This festival season most offers on home loans fall under one of two categories: Reduction in interest rate and waiver (partial or complete) of processing fee. 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