“Home is where love resides, memories are created, friends always belong, and laughter never ends,” an unknown author quotes this heart-touching statement for ‘a home.’

Everyone desires to own the home of their dreams. More than a desire, having your own home is a necessity. It saves one the trouble of living on the conditions of landlords, or frequently shifting from one home to another, or ending up paying high rental charges, etc.

Owning a house not only helps get rid of these hardships but also gives you a sense of achievement and provides safety. However, as the property rates are increasing rapidly, buying a house requires a huge amount of financing. Some manage, while several others struggle to arrange such a large chunk of funds for this purpose.

So what’s the way out? Housing loans!

These loans financially aid the purpose of buying your dream house. Besides, it also benefits you in terms of capital appreciation, tax benefits (for interest paid and repayment both), etc.

Factors to Consider When Applying for a Housing Loan

  1. Eligibility Criteria

It is crucial to know the maximum loan amount for which you are eligible. This is generally calculated based on factors like your income. You can estimate your home loan eligibility with a home loan eligibility calculator. This tool gives you a fair estimate based on your current liabilities, monthly income, and the value of the property.  Lenders also require applicants to satisfy certain basic criteria in terms of minimum monthly income, credit score & history, age, etc. It is a good idea to check these on the lender’s website before applying. 

  1. Type of The Loan Based on Interest Rates

The housing loan interest rates are categorised into two types, viz., fixed and floating rates. The fixed interest rate does not respond to market fluctuations and remains unchanged throughout the loan’s tenure. On the other hand, the latter fluctuates as per the market conditions. Further, the rates in the former are generally higher than that of the latter.

  1. Affordability / Money Outflow

Among the others, affordability is another crucial factor to consider before applying for a home loan. While paying off the EMIs, you should ensure that you comfortably manage your regular money outflows and costs of living. Besides, your EMIs shouldn’t block the way of unforeseen requirements of funds in the future.

Almost everyone has witnessed the difficult times during the COVID-19 pandemic. Other than the health issues, it introduced all of us to the financial crisis, which no one expected. This is why you should be well-prepared for a similar situation if it ever arises and determine your capacity to bear the monthly EMIs accordingly. 

  1. Tenure of The Loan

This refers to the period that you take to repay your loan. It has a direct relationship with your EMIs and interest rates. A longer tenure leads to smaller EMI amounts but significantly higher interest rates. In contrast, a shorter tenure results in higher EMI amounts and lower interest rates. To retrieve the money faster, lenders offer considerably lower rates to their borrowers. On the other hand, some lenders offer loan tenure up to 30 years to facilitate smooth repayment.

  1. Additional Charges And Margin Money

Lenders do not offer loans for 100% property value. Hence, you need to arrange enough margin money to cater to the needs of down payment, stamp duty, registration charges, etc. Also, before finalising on any lender, you should carefully check and enquire if there are any additional charges. This will help you avoid any last-minute surprises, allowing you to plan your finances better. 

  1. Other Terms And Conditions

The loan document contains various other terms and conditions related to defaults, penalties, prepayment, service charges, after-sales services, repayment options, etc. Make sure that you understand the loan document and its terminology thoroughly, as it is essential to make an informed decision. While there are multiple loan providers available in the market, it is crucial to choose one that caters to all your needs. Some lenders even provide doorstep service with a dedicated relationship manager, which helps you get a hassle-free housing loan while sitting at home.


Possessing your own house seems exciting and can be an extremely joyful experience. It brings you a sense of satisfaction and achievement. However, the loan you choose should not disturb your peace and pleasures by the financial burden that it carries. As a result, you must consider all the factors mentioned above before applying for the right loan to purchase your dream house. 

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