As a chartered accountant, scouting for home loans can be a breezy affair if you get the basics right. With the housing finance market in India having more than 80 players, it is essential for you to know the various intricacies of your home loan as it’s one of the biggest financial decisions of your life that can dictate the course of other essential financial goals such as your child’s higher education, his/her marriage, and your retirement.
With several prominent NBFCs moving into the home loan market, you’ve more options at your disposal than before. Let’s see the various aspects you need to know about your home loan.
The loan amount
One of the essential things to know about your home loan is the amount you need. Some factors determining the loan amount are:
Location where you intend to buy your home
Your credit score
Financial strength of the business
Apart from these, your personal reputation also plays an essential role in gauging the amount. As an established CA, successfully running your practice with a reputed client base would help you qualify for a bigger loan amount. Also, if you want to model your home to accommodate your practice, you need more funds.
For instance, the Bajaj Finserv Home Loan for Chartered Accountants has a maximum limit of Rs.2 crore. Along with the high loan amount, you also get to benefit from the company’s value-added services like property search that helps you to zero in on your dream home. You also get a customised report that familiarises you with all the essential financial and legal know-hows of owning a home.
The rate of interest on your home loan is a critical factor as it has a direct impact on your EMIs and subsequently your cash outgo. Being a secured mode of finance, the interest rate on CA home loans are competitive. Monetary policies of the government, economic growth, and inflation are some essential factors deciding home loan interest rate.
As a practising CA, the interest rate also depends on your past handling of loans and the income you generate every month. A healthy income coupled with a clean track record of serving past loans would help you better negotiate on home loan interest rates.
Know the tenor
Another essential factor to know about your home loan is its tenor. Your EMIs and the total interest you would be paying on your home loan is decided by its tenor. While a longer tenor would reduce your monthly EMIs, and vice-versa, you would end up paying more at the end. Let’s understand it with an example.
If you take a loan of Rs.50 lakh at 9% interest for 20 years, your monthly EMIs would come to Rs.44,986. However, for the same amount at the same interest rate for 15 years, the EMIs would be a little higher at Rs. 63,338.
Total payment (Principal + Interest)
Hence, it is essential to choose a home loan for chartered accountants with flexible repayment tenors that help you spread your monthly EMIs. Ideally, your home loan EMIs shouldn’t be more than 35-40% of your monthly income. Also, with an increase in income, you should increase your EMIs to repay the loan faster.
Flexi loan facility
When you are hunting for a home, several unexpected and unplanned expenses might come up. You might need to make an immediate down-payment to your builder or may need to modify a section of the space based on the requirement of your practice that calls for additional expenses. In such a scenario, your home loan should allow you to withdraw funds as per your needs to meet such unexpected costs.
Bajaj Finserv Home Loan for Chartered Accountants offers you a flexi loan facility where you can withdraw funds as and when required and pre-pay at no extra cost. With this facility you can potentially reduce your EMIs by up to 45%.
New-age home loans for chartered accountants offered by NBFCs come with facilities such as easy home loan balance transfer at an attractive interest rate and top-up loans to cater to you other needs such as decorating interiors.