Home renovation loans are one of the most common loan options, that individuals opt, to update their house with the latest trend and design.
This loan gives the borrower financial freedom to make any expense, without worrying about paying the full money upfront. Instead, they choose the option for small EMI options.
Let us look at some myths that surround Home loan.
Myths about home loan
1. Shorter duration is good:
It is often said that one should opt for smaller repayment tenure to avoid heavy interest. Though Smaller loan has less interest, the EMI also increases. So based o your income and repaying capacity one should opt for longer repayment tenure.
2. Good credit score guarantees loan approval:
A common myth about the home loan is that a good credit score is all you need. While credit score is an important criterion for a loan, it Is not an exclusive one. Various other factors determine the home renovation loan approval.
3. Prepayment penalty:
Based on the lender you are opting for a home loan; the repayment terms can differ. While some lender charges a penalty on prepayment, the others have no prepayment charges. So, make sure to check before you apply for a loan.
4. Lowest Interest rate:
Many people believe that a home renovation loan offers the lowest interest rate. Well, this is not true, there is no fixed interest rate for any loan being offered by NBFCs. Based on your eligibility, income and other factors, the interest rate is determined.
Conclusion
These myths are very common, and a detailed analysis of them might have given you better clarity of whether or not one should opt for them.
