What are the best home loan options available in India
It really depends on your requirement…Let me explain it from start…..its is better to have longer tenure home loan compared to lesser tenure if you have cash flow problem today….for example…
1. For a loan of Rs.50 lakh….the EMI = interest + principle. Principle is 50/20 yr=2.5 lakh/annum or 50/30 yr = 1.66 lakh/annum(in both the cases the interest will remain same per month). So your overall inflow of EMI is less in case of 30 years which increases your cash available at hand(instead of paying EMI) which you believe can be used for better returns elsewhere.
2. Also it increases your capability of taking higher amount of home loan because decrease in overall EMI increases your capability to borrow more.
3. If you are planning to keep paying EMI for the whole loan tenure, then its better to have a 20 year loan as you will be paying interest of extra 10 years for 30 year loan!
Which Bank Loan:
Also which bank should be approached for loan, you can check it in the following link: Best Bank for Home Loan – SBI , HDFC , LIC Housing , Axis , ICICI …As per the experience PSUs are better than private banks on a long term basis.
However if you want to check which particular product is better than the others, again it depends on your criteria….there are several home loan products…however 2 major I came across are as follows:
1.Normal loan : you will be charged interest and principle for a period of loan tenure. Currently there is no pre-payment charges applicable on the loan as per the RBI guidelines.
2. Homesaver(Standard chartered) or Max gain(SBI) etc.
–> Here you will be a given zero balance account which will be linked to your home loan account of that bank. If you have extra money or savings after paying the EMI, you can park that amount into this zero balance account which will calculate the interest rate after adjusting that saving amount with the remaining outstanding loan resulting in saving you interest for that particular day.
For example if your loan is 50L for 20 years @10% interest.
Your EMI is Rs. 48,251 in which the interest is Rs.41,666 and principal is Rs.6,584. If you deposit Rs.5 lakh in that account say for a month , you will be charged interest on only on 50L – 5L = 45 L (the interest will be charged on the adjusted amount on that particular day), which means your EMI will reduce to Rs.44,084. And you can take out that Rs.5L from account on any day you want.
This thing works if you have low EMI/income ratio, otherwise both normal loan and homesaver loan are same.