Home loans are your ideal financial solutions when buying a new property. These long-term loans provide ample funds to help you purchase your dream residential property.
NBFCs provide customized home loan for chartered accountants coming with extra features and benefits tailored for CAs. Applying for these loans is quick and straightforward. Some lenders even approve your application within 24 hours.
Follow this step-by-step guide to avail a home loan for CAs:
- Decide the loan amount you seek
A lender will not finance the total price of the property. You can avail a home loan up to 90% of the property price; you have to provide the balance amount as a down payment. This percentage is called loan to value or LTV.
Financial institutions check the LTV before sanctioning you the loan. A 90% LTV makes the loan risky. You may have to pay higher CA loan interest rates in such cases. A lower LTV can decrease the interest rate on your home loan. However, lower LTV may also increase the down payment amount.
Do decide on the loan amount before you apply. Also, use a home loan eligibility calculator to check how much you can avail depending on your income, existing loans, etc.
- Decide the tenor
The tenor of a home loan can stretch up to 20 years. Deciding the tenor is critical as your EMIs and total payable interest depend on it.
Consider the following example:
You have taken a home loan for chartered accountants of Rs. 20 Lakh against a rate of interest of 12%.
The EMIs and interest payable for different tenors will be as follows –
- EMI – Rs. 28,000 (approx.)
- Total payable interest – Rs. 14 Lakh (approx.)
- EMI – Rs. 24,000 (approx.)
- Total payable interest – Rs. 23 Lakh (approx.)
A short tenor makes your EMIs expensive but keeps the total payable interest low. Whereas, a longer tenor will have precisely the opposite effect.
Using a home loan EMI calculator can help you not only to decide the EMIs but also the tenor.
- Fulfill the eligibility criteria
You need to fulfill the following CA loan eligibility criteria:
- A Certificate of Practice or CoP that is active for at least 4 years.
- Own a house or office at the place where the lender operates.
Most lenders will require you to hold a good credit score. A credit score or 750 or more may help to avail lower interest rates.
NBFCs like Bajaj Finserv provide Home Loans for CAs against the fulfilment of all the above eligibility criteria.
- Ready all the necessary documents
The various documents you have to provide include:
- Documents of the property you are mortgaging.
- KYC documents – PAN, Voter ID, Aadhaar, Passport, Driving License, etc.
- Income tax returns for the last 2 years.
- Balance sheet and Profit & Loss Account Statement of the previous 2 years.
Note that some financial institutions may also ask for additional documents.
- Choose the right lender
The next step to take a home loan for chartered accountants is to compare the interest rates and charges to choose the right lender.
There are various charges associated with a CA loan that you have to take care of like:
- Processing fees
- Penal interest
- EMI bounce charges
- Foreclosure charges – Fees when you foreclose the loan.
- Part pre-payment charges – Fees if you part pre-pay the loan.
The final step is to apply for your home loan for chartered accountants. Almost every NBFC gives you the option to do so online. Make sure to avoid common mistakes while taking a CA loan.