The home loan is the preferred financial solution that many people go to arrange funds for buying and contracting a new home.

The home loan funds your needs of buying a home if you don’t have enough money at hand.

Despite secured, many people still don’t avail the housing finance as it means paying EMI and the interest amount.

It also keeps the income and monthly expenses of the borrowers affected for a long time.

Hence, everyone wants to enjoy the lower home loan interest rate.

If your credit score is higher and if you are well employed, then you may get reduced home loan interest rate.

If you wish to avail the housing finance and want to make the most of the lower home loan interest rate, then you can consider some factors affecting it. Read on!

• Your cibil score

Your cibil score is considered as the biggest factor influencing your home loan interest rate. If your credit score is 750 or more, then the lender that you apply the debt with may reward you with reduced home loan interest rate. This way, you may pay lower EMIs and deal with your outlays better.

• The loan amount

The higher is your loan amount; the steep will be your home loan interest rate. It is because the home loan is big-ticket finance; lenders’ risk for defaults is higher. Hence, you should try to apply for a lower amount or the limit that would suffice the needs. It will let you go for a lower home loan interest rate.

• Your income

If you are a self-employed applicant, then you will have a higher home loan interest rate than someone who is salaried. It is because the income of the salaried individual is considered stable.

• The type of home loan interest rates

You may come to borrow the loan with either of the two of the interest types – fixed and floating. Fixed home loan rates let you relay the money with a fixed rate + EMI. Floating home loan rates keep changing as it is dependent on the market fluctuations. The EMI amount may vary with changes in the market. The floating rates are inexpensive than fixed rates.

• Your gender

If you are a woman, then lenders may offer you a concession of up to 0.5% on the applicable and latest home loan rates.

• Your age

If you are young, then it means that you have more workable years left than someone nearing retirement. Not only may you be given the longer tenure but even avail a reduced home loan interest rate. It is as you are assumed to pay timely EMIs.

• The location and the value of your property

If your property is located in a growing area with the best of amenities, then it will carry a higher value than the one with poor connectivity and fewer facilities. The resale of such property may be harder for lenders in case of defaults. Also, the newer is your property; the lower will be the home loan interest rate due to a better value for resale.

• Government subsidy eligibility

The Central Government is pushing for affordable housing via its lucrative Pradhan Mantri Awas Yojana (PMAY) scheme. You can enjoy deductions on the home loan interest rate for interest paid on home finances for affordable homes.

• Down payment

The higher is your down payment; the lower will be the home loan rate that you will need to manage to pay over the tenure. The lower it is, the higher will be the interest charges that you need to deal with. Lenders offer up to 80-90% of the value of the property as the home loan. The remaining needs to be paid by the borrower as the down payment.

•  Your nature of employment

If you are employed with a known company, or a Central Government enterprise, then you may enjoy the lower home loan interest rate. It is because lenders will be sure of the timely payments that you will enjoy, along with retirement benefits. On the other hand, the employees of a Private Company may be charged with competitive loan rates.

The key components hampering the home loan rates are now discussed. This way, you will be able to save substantially towards the rate of interest.