A home loan is money borrowed from a bank or a financial institution to buy a house. The loan is repaid in installments over a set period, usually with interest. The house itself serves as collateral, meaning if you fail to repay the loan, the bank can take possession of the house.
Home loans typically have fixed or floating interest rates. In a fixed-rate loan , the interest rate stays the same throughout the loan term, making it easier to plan your payments. In a floating-rate loan , the interest rate can change depending on market conditions, which may lead to fluctuating monthly payments.
Before applying for a home loan, it's important to check your credit score, as it affects the loan amount and interest rate you may receive. You should also evaluate your ability to repay the loan without straining your finances. A home loan is a significant financial commitment, so understanding the terms and conditions is essential for making the right decision.