Interest rate (fixed vs floating)
Fixed stays the same; floating moves with the repo rate.
Why it matters
Floating home loans fall when RBI cuts rates and have no prepayment penalty.
What to check
"Fixed" rates that reset after 2–3 years.
Personal finance
Loans (India)
Indian lenders advertise the lowest EMI and a 'starting from' rate. What you actually pay depends on the rate you get for your score, the processing fee plus GST, the tenure, and what it costs to repay early.
Quick answer
Keep total EMIs under 40% of take-home pay.
Compare the and total interest, not just the EMI.
Prefer floating-rate home loans with zero prepayment charges.
Avoid personal loans for wants; use them only for real needs.
Find your fit
A few questions about your situation, not about the product.
0/20
Add one short need not covered above.
Answer all 2 questions to see the spec sheet to shop with.
The spec sheet, decoded
APR
Yearly cost including fees, not just interest.
Why it matters
Two loans at 11% can differ by 1–2% once fees are counted.
What to check
Lenders that quote only the flat rate.
Flat vs reducing rate
Flat charges interest on the full amount every month.
Why it matters
A 10% flat rate is roughly 18% reducing.
What to check
Consumer and vehicle loans quoted as flat.
Processing fee
Upfront charge, usually 0.5–3% plus 18% GST.
Why it matters
It is deducted from the payout, so you receive less.
What to check
Insurance bundled into the loan without asking.
Tenure
How many months you take to repay.
Why it matters
Longer tenure lowers EMI but raises total interest sharply.
What to check
Banks pushing 30-year home loans to make EMIs look small.
Prepayment / foreclosure charges
Fee for paying early.
Why it matters
Floating-rate loans to individuals cannot carry this; fixed ones often charge 2–5%.
What to check
Lock-in periods of 6–12 months.
Before you pay
- ✓Check your score first; 750+ gets the better rates.
- ✓Ask for the and full repayment schedule in writing.
- ✓Compare total interest across at least three lenders.
- ✓Confirm prepayment charges and part-payment rules.
- ✓Decline add-on insurance unless you actually want it.
Common traps
- !Instant-loan apps not registered with RBI, with hidden fees and harassment.
- !Choosing the longest tenure just for a smaller EMI.
- !Topping up a home loan to fund holidays or gadgets.
- !Missing EMIs — late fees and a lower score.
Home loans around 8–10% a year, personal loans 10.5–24%, credit card EMIs higher.