Down Payments related to home loans

Each type of loan has certain down payments which are in association with it. It is completely taken as the choice for the borrowers and customers if they wish to make the down payments for the loans which they have applied for. Today we have decided to let you guys know about the down payments which are related to that of the home loans and how one make opt for this

Home loans these days are for sure the most popular type of loans where each one of us who wishes to move into a completely new house or if we want to construct our dream house, have this option to apply for home loans without having any second thoughts. The home loans these days are being offered by almost all the lending institutions such as banks and NBFCs which is known as Non-banking financial company. Now, these banks first check the home loan eligibility of the borrower and the customers and then decide to lend them some amount of money to the bank along with the charge of certain price popularly known as the interest rate. According to the rate of interest, the customer and borrowers are instructed to pay their monthly payments which are in the form of EMIs. One more way through which the borrower or the customer can get their home loans is by availing the option of down payment. Down payment for the home loans is usually opted by the borrower or a customer who wishes to make all their payments at a single time, and this is known as the process of making a down payment for the home loan which they have applied for. We will now see and get to know what exactly is meant by this option of down payment that is subjected to the home loan.

For better understanding, let us say a borrower has opted for an Indian overseas Bank home loan and now let us see how that particular borrower will make his or her down payment for the home loan they have opted from the Indian overseas bank. Usually, the down payments are given a percentage of 20% by the banks and Non-banking financial companies on the final total amount of their respective property. In case if the same customer has his or her property that is of the value? 20,00,000 then the down payment on their property is accounted to be 20% on the principal amount which will then ask the borrower or the customer to a price of? 4,00,000. This is the basic calculation on how the down payments of the home loans are to be done.

One thing which should be crystal clear to every one of you is that the down payment of the home loan has no limits to which the borrower or the customer are subjected to make their payments. All these kinds of decisions which deal with the amount to be paid for the down payment is the choice of the borrower and customer and all they should do is to check with their income and financial status on which they can afford to pay for the down payments. It is always better for them to pay as much as they can afford to keep the situation of their families in mind. But one thing is obvious that is nothing but the more amount the borrower or the customer pays, they will have to pay less for the rate of interest on the home loan. That is the benefit of the down payment because it will reduce the price on the repayments which will be made by the borrowers and customers and it will be much simpler and easier for them and they will have to worry less about the due dates or about their debts which will be a big issue for most of the borrowers and customers who avail for the loans. And with the down payment, the home loan will be saved without being at any kind of default.

Author’s bio:

Gaurav S. Khurana is the Founder and CEO of Dialabank and has had a great career in the Banking and Financial Services Sector. He has an experience of 18 years in the sector and has worked at Senior Roles including National Sales Head at ING Investment Management India and as the Vice President Citibank. A post-graduate from IMT, Ghaziabad. Gaurav started his career as a Named Account Manager in Xerox.

Being a part of this field for a long time now, he has written many informative articles and blogs benefiting and assisting many in making decisions regarding the policies provided by various banks and non-banking financial companies such as theIndian Overseas Bank home loan policy.

Gaurav S. Khurana is the Founder and CEO of Dialabank and has had a great career in the Banking and Financial Services Sector. He has an experience of 18 years in the sector and has worked at Senior Roles.