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How To Raise Funds To Make The Down Payment On Your Home Loan

  • Highlights

  • You must pay 5% to 30% of the home’s value as down-payment

  • Save money for down payment with interest subsidy under PMAY

  • Use funds from a personal loan as home loan down payment

  • Pledge your investments or use the matured funds to raise money

The down payment forms an important part of a home loan, where you personally finance 5% to 30% of the value of the home and get the remainder from your lender. Most lenders ask for a 20% home loan down payment amount as your contribution for the purchase of a home. The more down payment you make, the less is your repayment obligation. Check how making a down payment reduces your EMIs by using a home loan EMI calculator.
In some cases, you may find it tough to raise funds for the down payment, given that you have to prepare for several other costs of the home loan and purchase, be it your broker’s fees, stamp duty, registration fees, or loan processing fees, as well as ensuring you have enough funds on hand each month to pay the EMIs.
The following strategies will help you raise funds for purchasing a home without stressing your finances.

1. Opt for the PMAY scheme

The Pradhan Mantri Awas Yojana was launched by the government in 2015 to provide affordable housing to the Indian population. PMAY aims to provide affordable housing to all by 2022, and if you are a beneficiary of this scheme, you receive an interest rate subsidy of up to 6.5% on your housing loan. As this greatly lowers the EMI amount that you have to pay, you do not need to keep additional funds on hand for repayment, and can instead use these funds for the home loan down payment. Check the eligibility parameters and other terms of this scheme to avail the subsidy.

2. Opt for an unsecured loan

If you lack the funds for making a home loan down payment, there is no better option than to avail an unsecured loan. You can easily approach a lender and apply for a collateral-free loan on low interest rate if you have a good credit score, and meet the lender’s other eligibility criteria as well. You can avail a Personal Loan from Bajaj Finserv to get a loan of up to Rs.25 lakh on a flexible repayment tenor.

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3. Raise funds from your investments

Investments can be a valuable source of income and finance. If you have a thriving investment portfolio you can easily raise funds to pay your down payment. Sell some shares to raise funds if you the market is performing well or simply pledge your FDs, mutual fund, and shares to raise a low-interest loan against securities. Pledging your securities allows you to access a high amount sanction on nominal interest, which on the one hand will fund your down payment requirement and, on the other, allow your investment to continue earning.

Once you raise funds for the home loan down payment, search for a good lender to avail the loan from. For example, when you opt for a Bajaj Finserv Home Loan, you get a high sanction of up to Rs. 3.5 crore on nominal interest. You will also enjoy additional benefits such as a top-up loan.

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