Easy to Get Home Loan to Build your Homestay

India’s tourism and hospitality sector will likely reach Rs.35 trillion by 2029, contributing about 9% to the total economy. This has presented an immense business opportunity for Indians, and they can invest in homestay business to make the most of it.

In order to set up the necessary infrastructure, individuals can take the assistance of secured financing options like home loan to fund their investment. Nonetheless, before moving ahead with the application process of housing credit, they should know about the eligibility criteria of the same, at first.

Eligibility Criteria for Home Loans 

Financial institutions have a set of home loan eligibility parameters that every applicant needs to meet before they apply for it.  Here are the highlights –

1. The applicant has to be either a self-employed or salaried individual and must be between 23 to 70 years of age.

2. Individuals should meet the monthly income criteria set by a lender.

3. Also, they must comply with the employment status, and work experience specified by a financial institution.

4. The credit score can also determine your home loan EMIs. Therefore, it is advisable to keep a CIBIL score of 750 and above, including a clean repayment track record, to get prompt approval.

5. The property in question must not have any pending legal claims or be developed by an authorised builder.

Even though these are basic eligibility requirements, certain parameters might vary from one lender to another. Hence, applicants should keep in mind the ones listed by their choice of lender and abide by them to avoid any issues during loan application.

Apart from these, one must pay heed to the documentation required to avail of this credit. Lenders put special emphasis on this aspect, and especially the property papers, as any disputes in that regard will result in a rejection of the loan application. Make sure to check the required list of documents for home loans on your preferred lender’s online portal and keep them handy to make the process easier. All these factors altogether increase the credibility of a borrower and help in interest rate negotiation as well.

Nonetheless, borrowers can still work their way to reduce the interest rate on their housing loans, to lower their financial burden.

Ways to Reduce Home Loan Interest Rates

Since home loan involves a sizable amount to build infrastructure for a homestay, the rate of interest plays a vital role in keeping the overall monthly instalments affordable. Here are some tips you can follow to find the lowest possible interest rate:

1. Choose a Shorter Tenor: Even though a longer tenor keeps your EMIs affordable, it will increase the total interest outgo and the rate of interest. Whereas, if you opt for a shorter tenor, it may surge your monthly instalment amount, but it will keep the rate of interest and the total interest payable in check.

2. Opt for Home Loan Balance Transfer: There are several reasons why you should be choosing home loan balance transfer, and one of the main reasons is to service a lower interest rate. Also, you can enjoy better repayment terms along with a top up loan facility. 

3. Arrange for a Higher Down Payment: Another great way to reduce your home loan interest rates will be to submit a substantial down payment. Since it will lower your overall outstanding amount, the rate of interest will remain lower as well.

Apart from these, your credit profile and employment stability also have a key role in reducing the interest rate on your housing loan.

Furthermore, to expedite the home loan process, leading financiers extend pre-approved offers. These offers streamlines this application process and saves time. These offers are available on multiple financial products like home loans, loans against property, etc. You can simply submit your name and contact number to check your pre-approved offer.

Investing in real estate to set up a homestay business can be a pricey affair. Therefore, instead of liquidating savings, individuals can take assistance off a home loan for this purpose. However, before getting into the loan application process, potential homebuyers should be aware of the eligibility parameters, document requirements, etc., beforehand to complete the process without any hiccups.