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21 December 2010

Loan Amount Reducing - Home Loans

Home loans are the best way for any person to fulfil their desire of a home and everyone wishes for owning a roof above their head. House is a basic necessity and each individual dreams of owning a dream home but the rates of property being very high it becomes impossible to save this amount and purchase a home. Home loans come as a boon for many customers and they can avail this offer and buy a place of their own.
The total amount offered as loan is reducing due to inflation and property prices rising. A normal 1 bedroom hall kitchen flat comes to 12 to 15 lakhs and a 2 BHK flat comes to 25 to 30 lakhs, depending on the area of property. Many people take home loans but removing instalments every month becomes tedious and stressful. If there are unexpected financial problems or death in the family this leads to defaulters and bad home loans. Many properties come up as distress sales due to this and the lending financial institutions are at a loss.
Hence many nationalised banks and private lending institutions have fixed the loan amount on maximum 80% of the total value of the property to be taken on loan. This ensures that the borrower pays a substantial amount before as down payment and the rest is recovered by monthly EMIs. Also the borrower has the benefit of taking less amount as loan and later leading to less monthly payments, as it is always advisable to take loan on lesser amount because this adds with interest during repayment.

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