The best ways to avoid being scammed on your Home Loan
A home loan is a fast track route to buying or building the home you have always wanted. But the real estate market has a number of frauds and scams flourishing within, making it hard to choose between a legitimate company and a fake one. And the lack of transparency and regulations make you a vulnerable target in this sector.
In light of the various housing loan scam issues in India, you may wonder if it is safe to invest in a home loan. The answer to this is yes, provided that you are aware of the tricks, scammers use to part you from your savings.
In this article, we’ll walk you through a few home loan problems borrowers face in India and how to avoid them.
Sniff-Out a Potential ScamBefore you actually sign the loan, be aware of the warning signs that may help you make a wise and secure decision.
- Advance Fees
The fraudulent company/agent may ask for fees upfront without having initiated the loan process.
- Lack of Proper Documentation
A legitimate company ensures that all documents and paperwork are in place for any transaction.
- Pushy Agents
Since scams are a quick way to make money, fraudsters will push you to sign documents that you have not fully understood.
- Requests for Personal Information
The fraudulent company may request a bank account or credit card number over unsecured communication lines such as a telephone.
Being Well-Informed to Avoid a Major Financial SetbackNow that you are aware of how to detect home loan scams, let us look at ways to prevent getting swindled.
Before you apply for a home loan, consider different banks and lenders and pick one which would be appropriate for you in terms of the loan amount and interest. Bajaj Finserv provides one of the best home loan interest rates in India.
Be aware that you do not have to spend anything until you sign the document. Do not pay any fees for processing, application, home visits, or anything else until an agreement is signed. Take your time to read and re-read all the paperwork. Remember that it requires a lot of patience and understanding to make a well-informed decision. You should also request solid references from the lending company. In case you have trouble finding the perfect home, many lenders like Bajaj Finserv offer property search services to help you out.
A Guide to the Home Loan ProcessA good home loan is an important contract to have for any home buyer. It not only eases the pressure on your pocket but also hastens the process of buying a home.
Once you have decided to opt for a housing loan, you have to formally apply for one with a trusted bank or lender. You can also apply online for a home loan. The application should be supported with valid documents such as address proof, income statement, employment details, and bank statements. The company will also charge a processing fee to initiate the loan process. For example, Bajaj Finserv charges a processing fee of 0.8% of the loan amount.
After applying, a verification process is initiated to check if all your documents meet the stated requirements. The company verifies your repayment capacity, which will largely determine the loan amount you are eligible for. There will also be a property verification to ensure legitimacy. Finally, the loan is signed and the disbursal process is initiated. Remember, processing fees are only deducted after the disbursal.
The best solution to avoid getting scammed is to be well-informed about the loan and the lender. This will ensure that your savings are being utilised to fulfil your real estate dreams and not someone else’s.