Should interest rate only be considered in choosing a home loan?
By Joseph Samson
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Force majeure clause: Force majeure clause in the loan proposal indicates a ‘situation beyond control' wherein under unavoidable circumstances like changes in internal policies of the bank, the bank retains the right to revise terms and conditions of an existing fixed rate loan scheme.

Security cover costs: The lender at times sets a clause in the loan proposal which says that in case during the tenor of the loan, the value of the mortgaged property decreases, then an additional security cover cost would be charged to the borrower over and above his EMI. This is applicable even if the borrower has been very regular in his repayment process.

Other charges: Apart from interest rates, the borrower should also look into various auxiliary charges put on the loan by the bank including processing fees, prepayment penalty, legal charges among others.

Fine prints of the loan proposal: Mostly the borrower happens to avoid reading the entire loan proposal thoroughly. This should be avoided in order to fall prey to any hidden clause, charges which may later on hit the borrower.

Also the borrower must take into consideration the past financial record of the bank/HFC, the quality of service offered to the customer etc.


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