There is a growing demand for real estate investments in Ahmedabad. However, since the property prices in key city locations can soar up to around Rs.1.3 crore, availing of a home loan has become an imperative option to reduce financial strain. 

But to make an informed decision, individuals looking for a home loan in Ahmedabad must consider several factors, as discussed in the following section.

6 things to consider while opting for a home loan in Ahmedabad

• CIBIL score

The foremost important factor to consider while availing of a home loan in Ahmedabad is the CIBIL score. Most financial institutions give preference to borrowers with higher CIBIL scores as it reflects their creditworthiness. In practice, a borrower with a CIBIL score of 750 indicates a low lending risk to financial institutions. Therefore, borrowers must ensure that their CIBIL score for a home loan is at least 750 or more. 

• Interest rates

It is crucial to check and compare the interest rates of various financial institutions while opting for a home loan. Borrowers must always opt for low interest rate home loans as it reduces the EMI burden. Apart from this, borrowers should also be aware of the floating and fixed interest rates. 

In floating interest rates, the interest rates change as per the market rates and therefore proves beneficial if interest rates are expected to fall in the near future. On the contrary, fixed interest rates remain unaffected by the changes in the market prices. It is always beneficial to opt for floating interest rates as fixed interest rates as the interest rates are generally higher for the latter and often associated with a foreclosure penalty.

• Tenor 

The EMIs are directly dependent on the tenor you chose for your home loan in Ahmedabad. Though longer repayment tenor reduces the monthly EMI costs, however, it is always beneficial to opt for shorter repayment tenor as it lowers interest burdens and also reduces the total home loan cost.

• Processing fees

Every home loan borrower needs to pay a processing fee to the lending institutions to process their home loan application. This charge varies from one institution to another. However, often some financial institutions include undue hidden charges of which the borrowers must be aware. Hence, you must go through the processing charges in detail as it may increase the home loan cost in the long run.

• Down payments

Generally, you have to pay 10 to 15% of the total cost of the property up-front, and the rest can be financed through home loans. To a great extent, home loan interest rates depend on the amount of down payment you make. It is always recommended that you pay a larger down payment if you have surplus cash available, as it will reduce the interest rates and consequently lower the EMIs.

• Equated monthly instalments

Last but not least, home loan borrowers in Ahmedabad must check and calculate the equated monthly instalments that they are liable to pay against the borrowed sum. This will help in adequate financial planning and reduce loan burden. Home loan borrowers can use a housing loan EMI calculator available on the official website of their chosen lending institutions to get a clear idea of the total interest payable, total payable ( Principle amount+ Interest rates) and EMI amount. It is suggested that the EMI should not exceed 45% of your total income.

Other factors to check while availing a home loan in Ahmedabad

Apart from the crucial points enlisted above, do not forget to check the following factors while opting for a home loan-

• Home loan documents
• Eligibility criteria
• Foreclosure and part pre-payment facility
• Top up loan facility
• Home loan balance transfer and additional charges

Individuals looking for a home loan in Ahmedabad must also check the pre-approved offers to ease the documentation process and ensure a hassle-free loan approval. Reliable financial intuitions extend these pre-approved offers on various financial products like a home loan, loan against property and more. Individuals can check their pre-approved offers by sharing their names and contact details.

Home loan is a major financial boon that makes availing property in any location extremely easy. However, to enjoy maximum benefits and reduce your home loan EMI liability, keep in mind the points discussed in this run down. This will ensure you avail of the right home loan in Ahmedabad as per your budget and avoid financial burden in the long run.