Home Loan Tips: Smart Ways to Save Money and Get Approved

When you're buying a home in India, a home loan, a long-term loan used to purchase residential property, often with the property itself as collateral. Also known as a mortgage, it’s one of the biggest financial commitments most people make. But getting approved isn’t just about having a good salary. Lenders look at your credit history, existing debts, and how much you can realistically afford each month. Many people focus only on the lowest interest rate, but the real savings come from smart choices before you sign anything.

One of the biggest mistakes? Choosing a 30-year term just because the monthly payment feels comfortable. A home loan EMI, the fixed monthly payment that includes both principal and interest over 30 years might feel easy now, but you’ll end up paying nearly double the loan amount in interest. Cutting the term to 15 or 20 years can save lakhs — even if your EMI goes up by a few thousand. And if your income allows, paying a little extra each month directly against the principal can shrink your loan faster without locking you into a rigid schedule.

Another hidden factor is your home loan eligibility, the set of criteria banks use to decide if you qualify for a loan, including income, credit score, job stability, and existing debt. Banks typically say you can afford an EMI up to 50% of your net income. But if you already have a car loan or credit card debt, that number drops fast. Clearing small debts before applying can make a huge difference. Also, check your CIBIL score — even a small dip below 750 can cost you higher interest or a loan rejection. Don’t wait until you’re ready to buy to check this. Fix it months ahead.

Interest rates matter, but don’t chase the lowest one blindly. A bank offering 8% might charge hidden fees that add up. Compare the total cost — not just the rate. Some lenders offer lower rates if you link your salary account or buy insurance through them. Ask for a breakdown. And remember, floating rates aren’t always better. If you’re risk-averse and want to lock in payments, a fixed rate might give you peace of mind, especially when rates are near historic lows.

Down payment is another lever you control. Putting down 20% instead of 10% doesn’t just reduce your loan amount — it often gets you a better rate and can skip the need for mortgage insurance. Save up, even if it takes longer. It’s not about rushing into a home; it’s about owning one without drowning in debt.

Finally, read the fine print. Some loans have prepayment penalties. Others charge for partial payments. Know what you’re signing. And if you’re an NRI or self-employed, your path is different — income proof, tax returns, and bank statements matter more than salary slips. Don’t assume the rules are the same for everyone.

Below, you’ll find real advice from people who’ve been through it — how to calculate your EMI, what documents actually get you approved, and the one mistake that costs most buyers thousands extra. These aren’t theories. They’re lessons from the field.