While looking for a home loan it is not sufficient to just compare the loan offers by different lenders. It is also important to compare the profiles of these lenders and choose the one suitable for you.

In today`s time, when you start your search for a home loan, you will immediately get multiple offers from various banks claiming to provide you the best offer. What are the criteria for selecting whom to go with?

The primary factors for this decision are the interest rates and other costs involved. However, it is also important get to know about the lenders themselves. Here is a step-by-step approach to help you determine the right lender for you.

1. Compare interest rates and fees charged The first step in your selection process will generally be to compare the interest rates and the fees charged by the bank. However, this may not be sufficient. You should try and get a breakdown of all the costs involved as well as how the interest rate is calculated, and how it is reset. You should also ask the bank about any other potential charges that may not be mentioned in the offer letter, for example, prepayment penalty. Here you are trying to get a good estimate of the numbers, but more importantly, are also trying to judge the character of the bank, in terms of their honesty, openness, etc. If the bank representative seems to be avoiding your question, it may not be a good choice.

2. Types of loans available Banking has changed tremendously and now many loan options are available for the prospective borrowers. You can choose between a fixed rate and a floating rate loan. Some banks also offer step-up loans, which offer a lower EMI in the initial period and then the EMI steps-up gradually. Look for a loan type that suits your situation and risk-taking ability.

3. Level of customer service The ease with which you can deal with the bank is also very important. See how you feel about the following questions:

• Ask the bank for a change in any terms and conditions, and study their response. Are they flexible, and ready to customize the loan per your requirements?
• When the market interest rates change, how soon will the bank pass those benefits to the existing customers?
• How easy is it to get any information from the bank?

If you are not getting good service from the bank, then it is not worth the trouble going ahead with them.

4. Lender's reputation If you don`t have any past experience with the bank earlier, it is good to check out their reputation by talking to family and friends. Their experiences can reveal a lot about what to expect.