When purchasing a new home, one of the most important decisions you will have to make is choosing the right home loan. Two popular options for home loans in India are the Bank of India and Bajaj Finserv. Both of these lenders offer competitive interest rates and loan amounts, but there are some differences that you should be aware of before making a final decision.
Factors To Consider for Home Loans
Building a home or renovating the same are important tasks that involve significant investment. Opting for a home loan is often one of the wisest choices. However, before going for a home loan, you have to consider the following factors:
A low rate of interest, when coupled with a short tenure, ensures that you would have to pay less towards repayment of your loan. Therefore, every borrower must aim for a low-interest rate and short tenure. However, it is worth noting that often you may come across a low-interest rate but a pretty long tenure. Such a situation comes with the benefit of smaller EMIs, but ultimately, you pay more over the entire tenure.
Bank of India home loans are offered at an interest rate of 8.85% to 10.45%. This rate is considered to be quite competitive in the market. On the other hand, Bajaj Finserv home loans are available at an interest rate of 8.60% to 14.00%. While the interest rate offered by Bajaj Finserv is also competitive, it is slightly higher than the interest rate offered by the Bank of India.
Do you need an enormous loan amount? The following banks cover a major portion of your requirements.
Regarding the loan amount, the Bank of India offers home loans up to 90% of the property value. It means that you can borrow up to 90% of the cost of the property you wish to purchase.
Bajaj Finserv, on the other hand, offers home loans up to 96% of the property value. It means that you can borrow up to 96% of the cost of the property, making it slightly more attractive for those who need to borrow a more significant amount.
The repayment period is another crucial aspect to consider when choosing a home loan. However, this factor is highly influenced by your financial situation. While some people who can pay a higher EMI prefer shorter tenure, others opt for more extended repayment periods.
Bank of India offers a repayment period of up to 30 years, while Bajaj Finserv offers a repayment period of up to 20 years. This means that you will have more time to repay the loan with the Bank of India, but you will also have to pay more interest over a more extended period.
Another essential aspect to consider is the processing fee. Bank of India charges a processing fee of 0.50% of the loan amount, while Bajaj Finserv charges a processing fee of 1% of the loan amount.
It means that the processing fee for Bajaj Finserv is slightly higher than that of the Bank of India.
Additional charges are often contributors to draining your money. If you wish to prepay your home loan, it is vital to consider the prepayment charges. Bank of India does not charge for prepayment, while Bajaj Finserv charges 2% of the prepaid amount. It is more cost-effective to prepay your loan with the Bank of India.
The eligibility criteria for a home loan are based on the income and credit score of the applicant. Both banks have their own set of standards for the same. However, a higher income and a credit score above 700 are appreciated by both banks.
The applicant must meet the eligibility criteria of the bank they are applying with. They must carefully go through the criteria enlisted on the official website.
Choosing the right home loan is an important decision that will significantly impact your financial future. Bank of India and Bajaj Finserv are popular home loan providers in India and offer competitive interest rates and loan amounts. However, there are some key differences that you should consider before making a final decision.
When it comes to interest rates, the Bank of India offers a slightly lower rate than Bajaj Finserv. However, Bajaj Finserv offers a higher loan amount, up to 96% of the property value, compared to the 90% offered by the Bank of India. Additionally, Bajaj Finserv has a shorter repayment period of 20 years, while the Bank of India has 30 years.
It is also essential to consider the processing fees, prepayment charges and eligibility criteria before applying for a home loan. Bank of India charges a lower processing fee and does not charge any prepayment charges, while Bajaj Finserv charges a higher processing fee and 2% of the prepaid amount.
It is also important to consider the customer service and reputation of the lender. You must read reviews and compare the terms and conditions of the loan, the documentation required, and the lender’s customer service before making a final decision.
Ultimately, the best home loan for you will depend on your individual needs and circumstances. It is important to carefully compare the interest rates, processing fees, and other charges of Bank of India and Bajaj Finserv, as well as the loan amount, repayment period, and the general terms and conditions of the loan, before making a final decision. It’s also important to check your eligibility and the documentation required before applying for a home loan. With the right home loan, you can make your dream of owning a home a reality.