The festive season is here, and lenders are pulling out all the stops to attract home loan borrowers. You can expect offers such as lower interest rates, fee waivers, cashback schemes, and flexible repayment options. While these deals can be tempting, a home loan is a long-term commitment and requires careful consideration. A hasty decision could strain your finances and derail your financial goals. Keep a few key factors in mind to ensure that an attractive offer does not end up costing you more than you intended over the long run.
1. Check the effective interest rate
The advertised interest rate may not always accurately reflect the actual cost of the loan. For a more accurate estimate of the loan cost, look at the effective interest rate or Annual Percentage Rate (APR), which includes processing fees, administrative charges, and insurance premiums.
2. Compare loan tenure and EMIs
While longer tenures can reduce your monthly EMI, they increase your interest costs over the loan period. On the other hand, shorter tenures can hike your EMI but lower your total interest outgo. Choose a tenure that aligns with your income and repayment capacity.
3. Watch out for hidden charges
Advertised offers may include costs that aren’t immediately obvious. Processing fees, late payment charges, prepayment penalties, and insurance can quietly add to your overall expense. Avoid surprises by carefully reading the fine print and clarifying any doubts with the lender before committing.
4. Assess your repayment capacity
Consider all your existing financial obligations before taking on a home loan. Make sure your EMIs are manageable and leave room for emergency expenses. Don’t let the excitement of a deal override sound financial judgement.
5. Check your credit score
A higher credit score improves your likelihood of getting a loan while also helping you negotiate a lower interest rate. Ensure your score is healthy and clear outstanding dues to strengthen your loan eligibility.
Festive home loan offers can make your dream home more affordable, but careful planning and due diligence are key. Take the time to compare options, understand the terms, and choose a loan that fits your finances, not just the seasonal hype.
Home loan offers
Several banks and NBFCs are rolling out attractive home loan offers this festive season. Axis Bank and HDFC Bank are offering loans starting at 7.40 per cent, while Bank of Baroda has loans from 7.45 per cent along with low processing charges and a free credit card. Bank of Maharashtra is providing home loans from 7.35 per cent with zero processing fees. ICICI Bank has a special processing fee of just Rs 5,000 (plus taxes) for salaried customers. IndusInd Bank is offering loans with extended tenures of up to 30 years at competitive interest rates.
Among NBFCs, LIC Housing Finance has loans starting at 7.50 per cent with zero processing fees, while Bajaj Finserv offers home loans from 7.45 per cent with flexible repayment tenures of up to 32 years.
Note: Data taken from respective lender’s website as on 24 Sep 2025; Offer validity, terms, and conditions may vary, and more offers may be available beyond those listed here; Compiled by BankBazaar.com
(The author is the Sr. Manager, Communications at BankBazaar.com. This article has been published as part of a special arrangement with BankBazaar)
