pdp-home-loan

Home Loan Essentials: Do's and Don'ts for Borrowers

A Home Loan is probably the biggest financial commitment most people make in their lifetime. It comes with a long tenure, a significant monthly EMI, and a detailed onboarding process. Whether you’re a first-time applicant or buying your second property, how you approach the loan application makes a big difference.
To help you get it right, here’s a list of practical Do's and Don’ts you should follow while onboarding your Home Loan.

Do's for Onboarding a Home Loan

  1. Know Your Eligibility
    Before applying, use an online eligibility calculator to get an idea of how much you can borrow. Lenders usually look at your age, income, repayment capacity, and credit history. Knowing where you stand helps you avoid unnecessary rejections.
  2. Check and Improve Your Credit Score
    A good credit score (usually 750 and above) increases your chances of approval and can get you a better interest rate. If your score is on the lower side, work on clearing your dues or reducing credit card usage before applying.
  3. Compare Loan Offers from Different Lenders
    Don’t settle for the first lender that approves your application. Compare interest rates, loan tenure options, processing charges, and customer service reputation. Even a small difference in rates can save lakhs over the loan term.
  4. Get a Loan Pre-Approval if Possible
    Pre-approval gives you a realistic budget and strengthens your negotiation power with property sellers. It also shows that you're financially serious and ready.
  5. Organise All Required Documents
    Typically, you’ll need:
    • ID and address proof
    • PAN card
    • Income proof (salary slips or IT returns)
    • Bank statements
    • Property documents (sale agreement, ownership papers)

      • Having these ready can speed up the verification process.

  6. Understand Your EMI and Total Repayment
    Use an EMI calculator to check monthly payments and ensure they’re manageable. Also, understand the total interest you’ll be paying over the loan tenure—it helps in comparing lenders effectively.
  7. Clarify All Costs Involved
    Besides the loan amount, you’ll have to bear:
    • Processing fees
    • Legal and technical verification charges
    • Stamp duty and registration
    • Insurance (if bundled)

      • Ask for a complete breakup of charges so there are no surprises.

  8. Read the Loan Agreement Carefully
    The terms and conditions mention foreclosure charges, interest calculation method (fixed or floating), late payment penalties, and more. Always read every clause and clarify doubts before signing.

Don’ts for Onboarding a Home Loan

  1. Don’t Overstate Your Income
    Some applicants exaggerate their income hoping to get a higher loan amount. Don’t do this. Lenders verify everything, and any mismatch can lead to rejection or blacklisting.
  2. Don’t Apply to Multiple Lenders Simultaneously
    Each loan application triggers a credit enquiry. Too many applications in a short span can lower your credit score and signal financial desperation to lenders.
  3. Don’t Ignore Pre-EMI and Construction Delays
    If you’re buying an under-construction property, you may have to pay pre-EMIs until possession. Also, if the project is delayed, your EMI burden increases without enjoying the property. Always check the builder’s track record.
  4. Don’t Forget to Budget for Other Expenses
    Apart from EMIs, consider:
    • Moving costs
    • Interior and furnishing
    • Monthly maintenance
      If you stretch your budget too thin on EMIs, these expenses can pile up and cause financial stress.
  5. Don’t Choose the Longest Tenure Blindly
    While longer tenures reduce EMI amounts, they increase the total interest outgo. Choose a balanced tenure where the EMI is manageable but the interest isn’t excessive.
  6. Don’t Agree to Verbal Commitments
    If the bank or builder promises anything—like faster disbursal, waiver of charges, or special interest rates—get it in writing. If it’s not in the agreement, it doesn’t count.
  7. Don’t Delay EMI Payments
    Once the loan is active, ensure every EMI is paid on time. Missed payments not only attract penalties but also damage your credit score and future borrowing ability.
  8. Don’t Rush Through the Process
    Buying a home is a big decision. Don’t let urgency push you into a loan or property you’re unsure about. Take your time to verify all documents, compare offers, and make a fully informed decision.

Endnote

Getting a Home Loan isn’t just about being eligible—it’s about being prepared. By following the right steps, organising your paperwork, and being honest about your financial capacity, you make the journey smoother for yourself and the lender.
A well-thought-out Home Loan gives you peace of mind, better interest rates, and the confidence to own your dream home without unnecessary financial stress. Take a breath, plan it right, and go for it with clarity.