A Home Loan is a long-term financial commitment. It is advisable to avail of a Home Loan after carefully understanding this financial product. In this process, borrowers may come across some common Home Loan myths, preventing them from opting for a Home Loan. In this article, we aim to debunk such myths, so that you can start your homeownership journey with confidence.
Myth#1: Interest Rate is the Only Factor to Consider
The Home Loan interest rate determines the feasibility of the loan. Consequently, when you get a low interest rate Home Loan, repaying the loan can become easier. However, the interest rate isn't the only factor that you should consider. Sometimes, a lender may offer you a Home Loan at a low interest rate but charge other fees, for instance, a legal valuation fee. Thus, borrowers should consider other fees and charges besides the interest rates.
Myth#2: You Will Be Charged a Prepayment Penalty on Home Loans
If you are a Home Loan borrower, know that the individuals who have availed of a Home Loan on floating interest rates can prepay or foreclose their loan at any time they want without paying any additional charges. However, individual borrowers who have availed of a Home Loan at a fixed interest rate may have to pay a certain amount of prepayment or foreclosure fee.
Also Read: Five Important Factors to Keep in Mind When Prepaying Your Home Loan
Myth#3: Lenders Only Consider Your CIBIL Score While Deciding on Your Home Loan Application
While having a good credit score, typically above 750, significantly increases the chances of getting approved for a Home Loan, it's not the sole deciding factor of an individual's Home Loan eligibility. Lenders also consider other factors, such as the applicant's employment status and income stability, age, and location of the property pledged as a security while deciding on a Home Loan application. Therefore, sometimes borrowers may get approved for a Home Loan, even though they have a low credit score.
Myth#4: One Should Always Opt for a Short Tenure
One can opt for a short Home Loan tenure if their financial standing allows them to repay the loan easily in the given duration. While opting for a shorter loan term leads to reduced interest payments, it also means having to pay higher monthly instalments. It's important to choose a term that allows you to make manageable payments without compromising other financial goals. Manageable EMIs can also help in making timely payments and avoiding any penalty charges. Additionally, many lenders offer options for early repayment, giving you the flexibility to shorten the loan term in the future if your financial circumstances improve.
Myth#5: Fixed Rate Home Loans are Better than Floating Interest Rate Home Loans
Both type of interest rates have their own set of advantages. The floating rates are subject to change based on market conditions. This option can be beneficial during periods of rate decreases, offering the possibility of lower repayment amounts over time. The fixed interest rates remain unaffected by the market conditions. Therefore, they offer predictability as the interest rate remains constant until the interest reset date.
Additional Read: Fixed vs. Floating Interest Rates
*Terms and conditions apply.
DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.
Trending Articles

[N][T][T][N][T]
BDA Property Tax in Bangalore – A Complete Guide2025-10-01 | 6 min

[N][T][T][N][T]
Jantri Rate Gujarat – A Complete Guide to Land Valuation2025-09-30 | 4 min

[N][T][T][N][T]
DLC Rate Rajasthan – What You Need to Know2025-09-29 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Khasra Number Explained: How to Find It2025-01-03 | 2 min

[N][T][T][N][T]
Understanding NOC in Property Transactions2025-09-29 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Token Money: Its Importance and Key Considerations2025-01-16 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Bigha in India: Convert 1 Bigha to Square Feet, Acres, and Hectares2025-01-31 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Gift Deeds: A Comprehensive Guide to Registration and Documentation2025-01-29 | 2 min

[N][T][T][N][T]
7 Ways to Manage Household Waste and Live Sustainably2025-09-26 | 3 min

[N][T][T][N][T]
Decoding Bigha to Square Metre Conversion in India2025-09-26 | 3 min

[N][T][T][N][T]
Minimum Annual Income for Home Loan – What You Need to Know2025-09-25 | 4 min

[N][T][T][N][T]
Maximising Tax Savings with Home Loans and Rent Payments2025-09-24 | 4 min

[N][T][T][N][T]
How to Save for Your Dream Home in India?2025-09-23 | 3 min

[N][T][T][N][T]
Can You Get a Home Loan Right After Starting a New Job?2025-09-23 | 4 min

[N][T][T][N][T]
How to Get a Home Loan for Your Dream Home in India?2025-09-23 | 5 min

home+loan Home Loan
[N][T][T][N][T]
What is Fractional Homeownership?2025-06-25 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Should You Use Your Annual Bonus to Prepay Loans? Here’s What You Need to Know2025-06-25 | 6 min

home+loan Home Loan
[N][T][T][N][T]
How to Use a Prepayment Calculator Effectively?2025-06-26 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Key Benefits of Availing of a Home Loan2025-06-26 | 4 min

home+loan Home Loan
[N][T][T][N][T]
How Home Loan Rates Are Determined – What You Should Know2025-06-26 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Understanding the Concept of Freehold Property in India2025-07-02 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Make Your Home Loan Work for You: A Simple Tax Declaration Guide2025-07-02 | 3 min

home+loan Home Loan
[N][T][T][N][T]
What is a Good CIBIL Score Range and Why Does It Matter?2025-07-03 | 7 min

home+loan Home Loan
[N][T][T][N][T]
4 Steps to Avoid Identity Theft and Credit Fraud2025-07-03 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Removing Credit Enquiries from CIBIL – What You Should Know2025-07-04 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Simplified Guide to Land Records in Odisha: Bhulekh Odisha ROR and BhuNaksha Verification2025-02-27 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Partition Deed: A Comprehensive Guide to Its Meaning, Format, and Registration Process2025-04-01 | 4 min

home+loan Home Loan
[N][T][T][N][T]
CIBIL MSME Rank Explained – Why It Matters for Your Loan Against Property Application2025-07-07 | 5 min

home+loan Home Loan
[N][T][T][N][T]
How to Get Commercial CIBIL Report – A Guide for LAP Applicants2025-07-07 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Mutation of Property: Meaning, Process, and Importance2025-03-20 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Possession Certificate: Meaning, Importance, and Application Process2025-03-20 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding the ECN Number in Your CIBIL Report2025-07-08 | 3 min

home+loan Home Loan
[N][T][T][N][T]
CIBIL Score Rules – What Every Home‐Loan Applicant Should Know2025-07-08 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Top-Up Loan, Personal Loan, and Gold Loan: Understanding the Differences2025-04-11 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Your Chances of Getting a Home Loan with a Pre-Qualified Offer2025-09-10 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Practical Tips to Improve Your Home Loan Eligibility2025-09-09 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Home Loan Eligibility for Rs.35,000 Salary in India2025-09-09 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Applying for a Home Loan When Your Salary is Paid in Cash2025-09-09 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Understanding How Home Loan Amount Depends on Salary in India2025-09-08 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Decoding the Right Home Loan Amount for Your Dream Home2025-09-08 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Getting a Home Loan When You Don’t Have Form 162025-09-15 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How Much Home Loan Can I Afford in India?2025-09-15 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Tips for a Home Loan in India – Your Complete Guide to a Smooth Application Process2025-09-12 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Rs.90 Lakh Home Loan EMI – A Complete Guide for Homebuyers2025-09-08 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Circle Rate vs. Market Rate – Understanding the Difference2025-06-17 | 4 min

home+loan Home Loan
[N][T][T][N][T]
What is the Ideal Home Loan Tenure?2025-09-05 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Minimum Salary Criteria for Affordable Home Loans2025-09-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding the Advantage of a Fixed-Rate Mortgage Loan2025-09-11 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Registration of Home Loan Agreement Explained2025-09-10 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Validity of a Pre-Qualified Home Loan – Everything You Need to Know2025-09-10 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Exploring Home Loan Eligibility: Rs.10 Lakh on Rs.15,000 Salary2025-09-15 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Locking Your Interest Rate with a Dual Interest Rate Home Loan – A Smart Way to Begin2025-09-17 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Lock Your Interest Rate with a Dual Interest Rate Home Loan2025-09-17 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Eligibility in India – How Much Can You Actually Borrow?2025-09-12 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Stamp Duty on Home Loan in India – What You Need to Know Before Buying a Property2025-09-12 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Eligibility on Rs.28.5 Lakh Income in India2025-09-16 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How Easy is a Home Loan Balance Transfer to a New Lender?2025-09-16 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Understanding the Home Loan Balance Transfer Process2025-09-16 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Is It Safe to Buy a RERA-Approved Apartment in India?2025-09-22 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Understanding the RERA Impact on Home Loans in India2025-09-22 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Selling a Property with an Ongoing Home Loan: What You Need to Know2025-09-19 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Eligibility for Salaried Professionals with Limited Work Experience2025-09-19 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Improve Your CIBIL Score for a Home Loan in India?2025-09-19 | 3 min

cibil Cibil
[N][T][T][N][T]
Check CIBIL Score with PAN Card for Free, in 3 Steps2024-02-27 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Advantages for First-Time Home Buyers2023-07-14 | 4 min

cibil Cibil
[N][T][T][N][T]
How Long Does It Take to Improve a CIBIL Score2023-03-29 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Understanding the Roles of Co-borrower, Co-signer, and Co-owner in Home Loans2025-03-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
A Guide to Applying for DTCP Approval for Patta Land Online2025-01-13 | 6 min

cibil Cibil
[N][T][T][N][T]
Impact Of a Co-Applicant’s CIBIL Score On Your Home Loan Application2023-01-20 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Stamp Duty and Registration Charges in Tamil Nadu2025-05-08 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Exploring Square Feet to Centimetre Conversion for Interior Design and Construction2025-03-27 | 2 min

[N][T][T][N][T]
Difference Between Pledge vs. Hypothecation vs. Mortgage2025-09-01 | 4 min

[N][T][T][N][T]
What Does it Mean to Pledge Your Property for a Home Loan?2025-09-01 | 4 min

[N][T][T][N][T]
How to Manage Your Home Loan When Interest Rates Change2025-08-29 | 3 min

[N][T][T][N][T]
Understanding Home Loan Pre-Closure2025-08-29 | 6 min

[N][T][T][N][T]
Factors That Influence Top-up Loan Interest Rates2025-08-29 | 5 min

home+loan Home Loan
[N][T][T][N][T]
How to Pick the Best Home Loan Tenure that Suits Your Budget2023-06-29 | 5 min

home+loan Home Loan
[N][T][T][N][T]
6 Ways to Reduce Your Home Loan Interest2024-03-20 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Home Loan Settlement: What You Need to Know2025-03-13 | 2 min

cibil Cibil
[N][T][T][N][T]
Easy Ways to Maintain a Good Business Credit Score2024-01-10 | 5 min

[N][T][T][N][T]
Plot Loan vs. Home Loan – Understanding the Difference2025-08-18 | 5 min

[N][T][T][N][T]
Home Loan for a Resale Property – Your Complete Guide2025-08-18 | 6 min

[N][T][T][N][T]
Home Loan Basics – A Friendly Guide for First-Time Buyers2025-08-14 | 3 min

[N][T][T][N][T]
Land Loan vs. Home Loan – Understanding the Key Differences2025-08-14 | 2 min

[N][T][T][N][T]
Salary Certificate for Home Loan – Your Complete Guide2025-08-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Things to Avoid When Switching Your Home Loan2025-04-02 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Transfers: Unlocking Better Rates and Terms2025-05-07 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Property Valuation for Home Loans in India2025-03-13 | 2 min

[N][T][T][N][T]
NRI vs. Indian Resident Home Loans2025-03-13 | 2 min

home+loan Home Loan
[N][T][T][N][T]
New Home Loan Subsidy Scheme: A Simple Guide for First-Time Homebuyers2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Home Construction Loan Application Guide2025-03-18 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Eligibility Guide for PMAY Urban 2.0: Credit Linked Subsidy Scheme (CLSS) Explained2025-01-13 | 2 min

home+loan Home Loan
[N][T][T][N][T]
How Your Bank Account Statement Affects Your Home Loan Eligibility2025-03-19 | 4 min

[N][T][T][N][T]
Common Mistakes First-Time Homebuyers Should Avoid2025-08-12 | 4 min

[N][T][T][N][T]
Home Loan for Self-Employed: Things to Consider2025-08-08 | 3 min

[N][T][T][N][T]
Understanding Terminology Related to Loan Against Property2025-08-08 | 3 min

[N][T][T][N][T]
Loan-to-Value Ratio – Why It Matters More Than You Think2025-07-31 | 4 min

[N][T][T][N][T]
How to Use a Home Loan for a Home Office Setup?2025-07-30 | 3 min

[N][T][T][N][T]
The Importance of an Encumbrance-Free Title in Home Buying2025-07-30 | 4 min

[N][T][T][N][T]
Smart Ways to Improve Your Home Loan Eligibility2025-07-29 | 2 min

tax Tax
[N][T][T][N][T]
How to Reduce the Loan Against Property Interest Rate?2023-12-11 | 3 min

[N][T][T][N][T]
How Your Profession Affects Your Home Loan Eligibility2025-07-28 | 5 min

[N][T][T][N][T]
Choosing the Right Home Loan Tenure2025-07-28 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Know the Survey Number of Land in India2025-04-01 | 2 min

home+loan Home Loan
[N][T][T][N][T]
BBMP: Full Form, History, and Role in Bangalore’s Governance