As far as metropolitan cities go, the real estate prices in Kolkata are still much lower compared to most other cities in India. That is why investing in purchasing a house in Kolkata may cost you much less than some other parts of the country. Also, with banks reducing their interest rates, home loans have become much more affordable than they were previously. Thus, if you are planning to invest in purchasing a home in Kolkata, now is as good a time as any.

However, before availing a home loan in Kolkata, there are a few things you should know. If you are a first-timer, especially, the following tips can guide you through the process.

Be mindful of the down payment

When you avail a home loan, the first thing you must bear in mind is that it is not 100% financed. It means that you cannot avail the advance to pay for the entire purchase value of a property. You have to make a down payment of 10% to 25% of the property’s value to avail the rest as a loan from a financial institution.

That is why, if you are thinking of investing in a property in Kolkata, you must ensure that you have enough funds to make the down payment. Unless you do so, you cannot avail a home loan online apply facilities for the advance.

Compare interest rates

Nowadays, most financial institutions set their lending rates based on MCLR. In the last few months, with the RBI announcing consecutive repo rate cuts, the MCLR has also decreased. That is why you can avail a low home loan interest rate from a financial institution.

Hence, if you want to invest in a property in Kolkata, you should first check the interest rates offered by various lenders and choose the best one.

Once you decide on the financial institution, make sure you calculate the monthly repayment amount. Knowing how much EMI you can afford beforehand can help you to plan your future finances better and considerably reduce the risk of default. You can make use of tools like online EMI calculator to know your exact repayment amount.

Check your eligibility to avail additional offers

A suitable interest rate should not be your only deciding factor while applying for a housing loan. Financial institutions offer various facilities on these advances to make them even more appealing to prospective borrowers. Some lenders offer perks like balance transfer facilities, top-up loans, no prepayment and foreclosure charges, and other home loan offers.

Aim for shorter tenure

You might think that opting for a longer tenure will make it easier for you to repay your home loan in Kolkata. However, a longer tenure will increase your total payable interest amount. The longer your tenure, the more number of EMIs and the amount of interest you will have to pay.

That is why it is best to look for ways to reduce your home loan tenure to save in interest payment. You can also opt to prepay your loan in full or part before the completion of your loan tenure. Do check if your lending institution levies prepayment charges before choosing to avail this option. These extra charges can lead to you incurring a lot of additional expenses.

These are the four most important tips that you should keep in mind before availing a home loan in Kolkata. In addition to these, don’t forget to keep all the necessary home loan documents handy before applying for the loan. Lastly, before availing any advance, make sure you read the fine print of the offer made by the lender to avoid any hassle later on.