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Home loan Interest Rate

When you are looking for your dream home, finding it may soon seem to be the easiest thing. What follows is the procedure to acquire that house, which often can be a strenuous and long one, as for most of us, buying a house is not possible without acquiring a home loan. When you start thinking about a home loan, the first thing that comes to your mind is home loan interest rates.

Today, there are a lot of financial institutions that claim to be offering the best home loan rates in India. While many deals may look attractive, it is advised not to fall for firms only because they are offering low-interest home loans. As a home loan is a long-term commitment, you need to be careful and judicious when making the decision.

Piramal Capital & Housing Finance is a reliable and trusted name in the finance sector. Having been in this field for quite some time now, the company understands the needs of a customer who needs a loan and offers one of the home loan interest rates in India.

Types of home loan interest rates

Before we discuss the house loan interest rates it is important to understand the 2 different types of housing loan rates.

  • Fixed home loan interest rates

    As the name suggests, such types of housing loan rates remain fixed. This means that the home loan rates that are applied stay the same throughout the tenure of the loan. As these rates remain constant, they allow you to plan your future finances accordingly.

  • Floating home loan interest rates

    Floating housing loan rates are variable. There are many factors that can affect the home loan rates today and thus, such loans often come with the risk of an increase in rates.

Should I choose Fixed or Floating home loan interest rates?

If there is a predictable decrease in the interest rates, then a fixed rate may not be suitable, however, on the other hand floating rates are susceptible to market volatility and thus, come with the risk of an increased interest accumulation.

In such a scenario, as a home loan borrower, you need to decide as per your suitability. Fixed housing loan interest rate is generally about 1% to 2.5% more than the floating rate. However, you have the option to switch from one type to another during the tenure of your loan and thus enjoy the best home loan interest rates.

Home Loan Interest Rates

Let's take a look at the current home loan interest rates offered by Piramal Capital & Housing Finance.

Slab Home Loan Interest Rate
Up to INR 35 lakhs Starting From 10.50%* per annum onwards
From INR 35 lakhs to INR 75 lakhs Starting From 10.50%* per annum onwards

If you are planning to go for a new home loan interest rate, this illustration will help you see its effect on the EMI that you would end up paying.

Loan Amount Tenure Rate of Interest EMI
INR 10 lakhs 10 years* 10.50%* INR 13,493
INR 25 lakhs 10 years* 10.50%* INR 33, 734
INR 50 lakhs 20 years* 10.50%* INR 49,919
INR 50 lakhs 30 years* 10.50%* INR 45,737
INR 1 crore 30 years* 10.50%* INR 91,474
*Terms & Conditions apply.

Methods to Calculate EMI

  • Use the Formula

    If you are good at traditional ways of calculation, you can use the given formula to calculate the EMI on your home loan:
    P*R*((1+R)^n)/(1-(1+R)^n)

    • Here, P stands for Principal loan amount
    • R is the Rate of interest
    • n is the Tenure of the loan (in months)
  • EMI Calculator

    The online EMI calculator available on the Piramal website is a free tool that allows you to understand how the EMI would affect your monthly budget. You can make use of the calculator as many times as you want, free of charge. By getting an appropriate estimate of the EMI you would be in a better position to make an informed decision.

Factors that can influence the Home Loan Rate

When learning about the current home loan interest rates, you must also know about the following factors as they can greatly influence the EMI.

  • Type of Interest

    While the fixed rates will not change, the floating rates would be influenced when the RBI brings in any modifications.

  • The ratio between loan and value

    The loan to value ratio, better known as LTV, is the maximum limit that the lender can extend. It is a percentage of the property’s present market value. In order to decrease the loan quantum, you can increase the down payment.

  • The Property

    The resale value of the property depends on factors such as its location, its condition and also its age. Any property with a high resale value becomes a lucrative opportunity for the lender, who would attract the borrower with low-interest home loans.

  • The Term of the Loan

    There is a direct relationship between the loan term and the home loan interest rate that you pay. The longer the tenure, the lower would be the EMI.

  • The Borrower’s Gender

    Most financial institutes offer a much better deal to women borrowers.

  • The Borrower’s Profile

    In most cases, salaried employees are considered to be a safe bet as they have a stable income. Also, maintaining a good financial profile can help you in attracting competitive interest rates.

Can I reduce the burden of my home loan EMI?

Having gone through the factors that can influence the home loan rate, you may feel there isn’t much you can do about them, yet, fortunately, you can. Given below are a few simple yet effective tips that can help decrease the EMI burden on your shoulders.

  • Choose as short a Tenure as possible

    With the option of repaying your loan in as many as 30 years, home loans are long term commitments. But when you choose a shorter term, you can keep the interest accumulation in control.

    Bonus Tip:Make use of the PCHF Home Loan EMI calculator to finalise the EMI amount that suits your budget.

  • Keep a good Credit Score

    A score over 800 is regarded to be a good score and can greatly help in reflecting your creditworthiness.

  • Try the balance transfer facility

    If you feel some other institute is offering a better housing loan interest rate, you can switch your outstanding amount there.

    Bonus Tip:PCHF not only offers you affordable rates, but the hassle-free procedures make repaying your home loan easy and stress-free.

  • Try to Prepay

    Got a bonus/ hike? Use the surplus lump sum amount to prepay the home loan. You can also try part-prepayment as that too greatly helps in reducing the principal amount.

  • Go for an EMI revision

    After taking the loan, if you feel you are in a better position to clear the EMIs you can always go for an EMI revision.

  • Compare the offers

    Before making your decision, make sure you do your homework and research well about the best home loan interest rates deals that are available in the market.

In Conclusion

With Piramal Capital & Housing Finance on your side, you can rest assured that your dream of owning your own house will turn into a reality. At PCHF, it is our endeavour to make this transition a smooth and comfortable process.