Things to consider before applying for Loan in India

1. Type of the Property
You should know your type of property for which you are seeking a loan. Financial institutions offer loans to the Resident Indians and NRIs for various types of properties such as ready to move in property, under construction property, self-construction property and for home improvement purpose. For each type of property, different types of loans are available and involve different interest rates.

2. Loan Term
Loans offered by various financial institutions have various tenures or loan repayment period. You should know the term or period of loan offered to you. You can go for a loan that may have tenure of up to 25 years. A loan with longer tenure may prove easier on the monthly payments but expensive on the entire loan in the long run.

3. Rates of Interest
There are two ways in which a bank charges you a rate of interest against your loan – fixed rate and floating rate. In fixed rate, you pay the same rate of interest throughout the loan period while in floating rate; the interest rate keeps changing, depending upon the market conditions. You have to decide on the type of interest rate on your loans.
Many financial institutions give you the liberty where you may switch from a floating rate loan to a fixed rate loan, once a year without charging you any extra fee. But this should be checked in advance before taking the loan.

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