Essential Home Loan Terms Every First-Time Buyer Should Know
Buying your first home is a big step. It’s exciting, but it also comes with many questions—especially when it comes to home loans. If you're planning to buy a 2 BHK flat in Pune, understanding basic home loan terms can make your journey much easier.
At Abhinav Group, we believe in helping buyers make smart and informed choices. In this blog, we’ll explain the most common home loan terms in simple words, so you can confidently move ahead with your home-buying plans.
1. Principal Amount
This is the actual amount of money you borrow from the bank. For example, if the cost of your 2 BHK flat in Pune is ₹70 lakhs and you pay ₹20 lakhs from your own savings, the remaining ₹50 lakhs is the principal loan amount.
2. Interest Rate
This is the extra money you pay to the bank for borrowing the loan. It is a percentage of the principal amount. There are two types of interest rates:
Fixed Interest Rate: Same rate throughout the loan period.
Floating Interest Rate: Can increase or decrease based on the market.
Tip: Compare interest rates from different banks to find the best deal.
3. EMI (Equated Monthly Installment)
EMI is the amount you pay to the bank every month. It includes both principal and interest. Your EMI depends on the loan amount, interest rate, and loan tenure.
Use online EMI calculators to check how much you’ll need to pay monthly for the flats in Pune for sale 2BHK you’re considering.
4. Loan Tenure
This is the time period in which you agree to repay the loan. It is usually between 10 to 30 years. Longer tenure means smaller EMIs, but you will end up paying more interest overall.
5. Down Payment
This is the amount you need to pay upfront from your own pocket. Most banks offer 75% to 90% of the property value as a loan. The remaining amount is your down payment.
For example, for a flat worth ₹70 lakhs, you might need to pay ₹7 to ₹14 lakhs as a down payment.
6. Processing Fees
Banks charge a small fee for processing your home loan application. This fee usually ranges from 0.25% to 1% of the loan amount. It’s a one-time payment, and non-refundable.
7. Prepayment & Foreclosure
Prepayment means paying extra money towards your loan before time.
Foreclosure means paying off your entire loan before the agreed period.
Some banks charge a fee for this, so check the terms before signing.
8. Sanction Letter
Once your loan is approved, the bank will give you a sanction letter. This letter mentions your loan amount, interest rate, EMI, and other important terms.
9. Disbursement
After your home loan is approved and paperwork is done, the bank will release the loan amount to the builder or seller. This is called loan disbursement.
10. Credit Score
Your credit score shows how well you manage your debts. A score above 750 is considered good for home loan approval. Always check your credit score before applying for a loan.
Why This Matters for First-Time Buyers
Understanding these terms helps you:
Make better financial plans
Avoid hidden charges
Compare loan offers easily
Choose the best option for your needs
Buying Your First Home with Abhinav Group
At Abhinav Group, we’re here to support you at every step. Whether you’re exploring flats in Pune for sale 2BHK or looking for a budget-friendly 2 BHK flat in Pune, we offer high-quality homes in prime locations with trusted bank tie-ups for easy financing
.
Visit our official website: https://abhinavgroup.co.in/ to check our latest projects, explore floor plans, and book site visits.
Final Tips for First-Time Buyers
Always read the fine print before signing any loan document.
Ask questions if anything is unclear—banks and builders are there to help.
Plan your EMIs based on your monthly income and future needs.
Keep some savings aside for registration charges and interiors.
Ready to buy your first home in Pune?
Choose Abhinav Group for trusted quality and perfect locations. Let us help you turn your dream into reality.
For more info, Visit- https://abhinavgroup.co.in/
