It is a common perception that credibility matters only where money is invested, spent or lent i.e. at the money receiver’s end. This holds true when you avail a home loan based on your home loan eligibility because you are borrowing the money with the condition that you will repay the amount with interest to your lender over a specified term. This need for repayment underlines the fact that if you’re a borrower, the credibility of your lender also matters (as much as yours) while applying for a loan and during the loan tenure.
Here are some points you must consider to check the credibility of the lender;
- When you opt for a home loan, you must strike the right interest rate deal from your lender. While doing so, meticulously check for a hidden charge or any cessthat’s waiting to pop up especially when you know that you have gained the lowest interest rate. Only a Bank with credibility will adhere to transparent dealings.
- If you have opted for a floating (variable) home loan interest rate and should there be a revision in the interest rate in future, only a bank with credibility will charge you exactly as per the prevailing rate, then.
- If you are eligible for the Government sponsored Credit Linked Subsidy Scheme (CLSS) under the Pradhan MantriAwasYojana (PMAY), ensure that your lending Bank or NBFC has executed the MOU either with National Housing Bank (NHB). The Bank which gives the loan will claim the subsidy benefit for the eligible applicants from NHB. The subsidy amount is given to your Bank and will be credited to your loan amount.
- A lender’s track record also comes to light during the time of payment demands made by your builder. The Bank has to disburse the reasonable amount within the stipulated deadline to the builder failing which the builder may levy a late fee/penalty on you.
- When you apply for a home loan, you need to furnish various documents pertaining to your income proof, tax returns, Aadhaar, PAN, agreement copy, among others. A bank with credibility will not only ensure their safekeeping but also maintain their confidentiality.
A home loan (unlike most loans) is a gateway rather to an investment than a liability. As a borrower, when your credibility reflects at the time of applying, the loan process is simplified to a large extent.
However as a responsible borrower you must also ensure that your lender is genuine. There has to be a win-win situation for you and your lender which will pave a path without rubble on your route to owning your dream home.