Home Loan Interest Rates Options Offered by Various Banks

It's obvious that when you decide to take a loan for, say, education, going abroad, or else if you wish to buy a home, you research about the best options available in the market, since repaying the loan is a major ordeal. So you need to weigh in the advantages and disadvantages of the kind of loan you select. There are two kinds of loans, i.e., Fixed Interest Rate loans and Floating Interest Rate loans.

Fixed Home Loan Interest Rates

This one is limited as banks do not allow or encourage fixed interest home loans; it is limited to only the first two to three years. A fixed home loan interest rates entitles you to a fixed rate of interest at monthly installments throughout the tenure of the loan. Thus, the interest rate remains the same irrespective of the market changes.

The major benefit of this loan is the fact that even if the market rate becomes higher, your interest rate remains the same. This in turn brings about a certain predictability to the market scenario and also a certain sense of relief to those who have to repay the loan.

The major drawback to this form of loan system is that the interest rate is a bit higher than the floating form of home loan, and even if the market prices decrease, our interest rate remains the same. So you cannot avail the benefit of the decrease in market rate, i.e., a lower interest rate. Thus you should plan carefully and check for the market rates. If you think the market rates are going to go higher, then it is beneficial to select a fixed loan than a floating loan.

Floating home Loan Interest Rates

In this case, the interest rates are not really fixed but fluctuate at certain intervals, i.e., as and when the market prices go higher or are low.

The biggest benefit of making use of a Floating home Loan is the fact they are less expensive as compared to a fixed loan. The percentage difference is about 1 to 2 percent but it does make a difference. Also the fact that you can enjoy the benefits of paying a lower interest rate whenever the market rates tend to fall.

The major drawback of this sort of a loan is the unevenness of payment every month since there is no fixed rate at which the repayment needs to be done.

Tips to cut down on your Car Loan Interest Rate

Investing in a car is the second largest investment any individual ever makes in his or her life after a house. Many of us always finance our car dreams through a car loan. However, amid-st the excitement of getting a new car we really don't try to look into the intricacies of different finances associated with it.

Do you know with few calculations and alterations you can cut down on the premium you pay for the car insurance and also the rate of interest liable on the loan you have borrowed. We list down few tips to take into consideration on how to reduce your car loan rate of interest.

Keep your credit score in check

It is very important to know your credit score. It is one of the first thing lenders take a look at when lending you money. Also, accordingly define the rate of interest over your car loan. Therefore, higher your credit score, lower will be your rate of interest.

If you feel just paying off your debt is all enough to keep your credit score good, then wait and have a keen look. It is also important to pay your debts on time. For instance, a delay of even 30 days is taken into consideration.

Shop around

Do not stick to just one bank or non-banking institution to provide you with your car loan. It is very important to shop around and look for options provided by few in the market. Look for the rate of interest applied by few institutions based on your credit score and accordingly take your call.

Bargain with your existing loan holder

It is always advisable to go with your existing loan provider. However, if you are getting a car loan at a lower rate of interest, then bargain with your loan provider and discuss the offers you are getting from other banks and non-banking institutions.

Finally, choose the institution that provides you the lowest rate of interest and a convenient mode of payment.