4 Smart Ways to Save for Home Loan Down Payment
Once you have your Home Loan application approved, the next step is to arrange money for the down payment. Most loan takers are wary of this part and rightly so since one misstep can lead to you losing out on the loan. It also affects your creditworthiness. But if you are smart about managing your expenses and make a concentrated effort to procure the necessary funds, chances are you’ll sail smoothly through the down payment process.
Before you take a look at how to save for Home Loan down payment, let’s understand the basics of loan down payment.
Home Loan Down Payment: The Essence
Down payment is the initial payment made before acquiring credit of any sort. Most banks charge a fixed percentage of the actual loaned amount as down payment. But each bank has a different Home Loan down payment requirement, that usually lies somewhere in the range of 15-20%. The main purpose of demanding a down payment is so that the lender can use it as collateral in case you are unable to pay-back the loan in the future.
Failure to pay the down payment before the lender’s deadline can result in the cancellation of your Home Loan. As a borrower, you need to be very diligent during this part of the loan procurement process. Familiarise yourself with the concept of down payments.
Some Tips to Save for Home Loan Down Payment
Ideally you should know about the requirement for a Home Loan way before you actually decide to get one. This will give you enough time to devise a plan that suits your financial situation and will also enable you to arrange for the necessary funds, be it through expense management or by borrowing money from friends and family.
Another Home Loan down payment options is to get the money for down payment by selling some property that isn’t of much use to you anymore. For instance, if you have a second car just stored in the garage, or a vacant plot somewhere that you don’t plan to use, sell them and use the money for your down payment.
Take a Personal Loan
If you can’t use the above tips to your advantage, you can always apply for a personal loan to solve your financial deficiencies. Financial service providers like Bajaj Finserv offer Private Loans with a lot of additional benefits like instant online approval for loans up to Rs 25 lakhs, and part prepayment facilities. Opting for a personal loan to meet a down payment cash requirement, might prove to be a quick way to access funds.
Borrow Against Your Life Insurance Policy
One of the more conventional ways to get money for a down payment is to borrow against your life insurance policy, especially if the life insurer extends the amount. This is because you can benefit in terms of a lower interest rate and an easy repayment schedule. ‘How to save for a down payment?’ is a question that has bothered many Home Loan applicants. Once you have figured out the down payment part, look at the various financiers that offer Home Loans. One of them, Bajaj Finserv, offers online Home Loans at low interest rate and also offers refinancing options.