For a long-tenure loan, opting for the lender offering cheapest interest rates is the obvious choice
But if you have a choice, go for a bank over housing finance companies (HFCs)
The benchmark — MCLR (marginal cost of funds based lending rate) — that banks peg their rates to is more transparent than the benchmark HFCs use.
Soon, MCLR, too, will be replaced. Banks will need to link interest rates to an external benchmark, which will make interest rates movement on your loans completely transparent
HFCs, however, are more flexible in evaluating your credit profile. Many are willing to lend to individuals with a low credit profile
HFCs can also offer a higher loan amount. But beware of the compulsory bundling of life and home insurance products