Pre-plan your Home Loan Now

July 16, 2014 . FundsIndia Desk

This article is a contribution towards our financial literacy series. It has been written by a specialist in credit and debt counseling – Satish Mehta, Founder and Director of

137535921832-Loan_hutPre-planning is better than planning…just like pre-paying is better than paying. Owning a house is a life time dream for many of us. Undoubtedly, the most common way of accelerating this quest is by availing a home loan. It would only be correct to state that the first step towards fulfilling this dream should be preparing a “check list.” It will certainly help you make the process easier and smoother.

Here are some suggested steps which you should ensure while planning your home loan:

STEP 1: Evaluate your budget – Draw a budget sheet and evaluate your income, expenses and consider your contingencies and savings before you decide on the loan amount, and therefore on your home. Be realistic in your approach. Your loan should not end up being a burden for you in the event of unforeseen circumstances.

STEP 2: Check your credit report and score – This is a rather unusual step. Many of us would have felt that this has to be done by the lender before they grant us a home loan. Your credit report and score can decide the fate of your loan application and hence, it would be nothing but wise to check your report and score.

STEP 3: Choose your property – Before starting to search for a lender, you should probably search for a property that suits your needs, check if the said property is clear from any kind of legal disputes, if the builder has a good reputed track history and then go for it.

STEP 4: Ownership title – Pre-plan the ownership of the property and also the borrowers for the loan. This is important from a tax planning perspective and also the lending institution’s perspective to know your obligation towards the loan and to quantify your eligibility.

STEP 5: Choose your lender – Features like the rate of interest, type of interest rate, i.e., fixed or floating, repayment options, other fees, etc., to a great extent play a role in the selection of the lending institution. Compare and evaluate the options but most importantly, consider your own priorities and repayment capacity before zeroing down on any one of them.

STEP 6: Read the Loan Agreement – This might be the last step, but it is definitely not the least important. Do not be in a rush to sign the Loan Agreement. Certain terms in the Agreement could have the potential to compromise you. This makes reading the agreement extremely important before committing to any of its Terms & Conditions.

These simple and easy steps could help you save a lot of your time and will be your guide in pre-planning your home loan. Don’t forget, it is a way your dreams will realize.


Satish Mehta is the Founder and Director of – a credit and debt counselling company that provides end to end customized counselling to individuals by handholding them through their credit life cycle.

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