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3 Common Myths That You Should Know About Before Applying For A Home Loan In Delhi
Getting a home loan in delhi or anywhere else is not a simple task. There are so many things that you have to keep in mind when applying for a home loan in Delhi or any other metro city of the country - after all, it's a decision that can affect your entire life. But people often make the mistake of falling into the well laid trap of myths regarding loans - whether it's about home loan, business loan, personal loan or loan against property in Delhi. This is why you need to be extra careful when applying for a home loan from a bank or an NBFC (Non-Banking Financial Company). Let us take a quick look at some of the prevailing myths regarding home loans specifically.
1) A shorter tenure is better than a longer tenure
A lot of people believe this myth and end up regretting their decision later. Even though the shorter tenure could possibly help you repay your loan faster, but keep in mind that it also has the potential to ruin your finances. A shorter tenure means higher EMIs, which means lower liquidity in your accounts. Thus, your purchasing power is significantly reduced and you also stand tye chance of becoming ...
... a defaulter if an unforeseen financial crises appears in the future. A longer term is therefore a better option as it gives you some breathing room and also keeps the option of prepayment open for you.
2) Low interest means better loan
This is one of the most common myths you can fall victim to.
There is so much hype regarding the low interest home loans that people often tend to neglect other factors. Although a low interest loan might mean smaller EMIs, it's going to be of no use to you if the amount that is being disbursed does not meet your requirements.
3) Fixed rates are better than floating rates
Before we bust this myth, let us understand what fixed and floating rates mean. Well, simply stated, fixed rates mean that you will be paying a fixed EMI throughout the tenure of the loan that you have taken, whereas floating rates mean that your EMI would vary according to the market situation. If the market is doing well, you'll have to pay lesser than the EMI originally agreed upon, but if the market worsens, then you will have to bear that loss and pay more than the agreed upon amount. It does make sense to go for fixed rates in light of this knowledge, but if you have a high risk appetite then you can go for floating rates as well. The thing is, there is no clear winner between the two. What you should go for should depend upon your personal attitude and risk appetite.
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