Hi everyone,
I would like to share my experience — actually, a painful one — that I went through because of the mortgage or home loan I had taken. I’ll try to share a few of my key lessons briefly, without wasting much of your time.
Mortange / Home Loan Application
At first, I searched for banks that could provide a quick loan and help me balance-transfer my existing one to combine both as a single loan. I approached two to three top-rated banks that offered low interest rates.
However, I had some issues with my CIBIL score, which prevented me from getting the loan at that time. I should have waited for some time or avoided taking the loan altogether. But instead, I went ahead and took a loan from a finance company that offered me the same rate of interest.
What should I have done?
In general, I would say — avoid taking any sort of loan if possible. Don’t create an EMI burden for yourself. Save your money and then build your house while staying in a rented place or a smaller home.
Alternatively, you could buy a plot on the outskirts of the city and wait for its value to appreciate over time.
If taking a loan is unavoidable, get it from a reputed bank that offers lower interest rates and minimal processing fees.
Mortage / Home Loan Tenure
As a beginner in my career, I had very little idea about how loans actually worked. This was my second loan, after a personal loan that I was about to close. I should have waited until closing that loan first, but I didn’t.
I took a new home loan from a finance company because they made the EMI look smaller and appeared more friendly. This finance company was actually a subsidiary of one of the top-rated banks that had earlier rejected my loan application.
The representative offered me a 30-year tenure, but never explained their policy clearly — where the principal repayment is very slow at the beginning, while the interest forms the major part of the EMI. I had thought both the principal and interest would reduce simultaneously.
What should I have done?
Even if I had to take a loan, I should have chosen a shorter tenure, cut down on other expenses, and aimed to close the loan as soon as possible.
After paying for six years, I realized that only about 0.5% of my principal had been reduced — which was shocking!
So yes, I should have taken a shorter-term loan and repaid it as quickly as possible.
Mortage / Home Loan Processing & Pre-Closure Fees
Always compare all charges before choosing a bank — including processing fees, documentation charges, and pre-closure penalties.
Some banks may show a lower interest rate but might have hidden or higher fees elsewhere. So make sure to ask a lot of questions and clarify everything with the sales team before finalizing the loan.
Bank vs. Finance Companies
Never go with a finance company unless you have absolutely no other option. Banks usually follow government regulations to some extent — but finance companies often do not.
If you delay even by a single day, they will start chasing you aggressively, causing unnecessary stress. Their sales teams also make promises that they never fulfill — for example, an EMI holiday or grace period, which they rarely offer.
Another big trap is their floating interest rates. Initially, they seem attractive and lower than banks, but soon after you take the loan, they increase the rate citing “changes in government policy.” Once it goes up, they almost never reduce it again.
So, avoid finance companies whenever possible.
Final Advice
Take a loan only when it’s truly necessary.
Never take it just to show off or for unnecessary spending.
Because once you step into the web of debt, it’s very hard to escape — it can trap you for a long time, sometimes even until the very end.
Would you like me to make this sound more professional (blog-style) or more personal and conversational (storytelling tone)? I can tailor it for publishing or sharing.
