A home loan means only one thing- that you are planning to buy a house, and the joy it brings is one of the best. But every person who wishes to take a home loan has to go through the hassle of repaying the loan. Need not worry; we are going to share some tips to reduce your home loan interest rates.
- Home Loan Balance Transfer
Home Loan Balance Transfer is one of the best ways to help you benefit from other lenders offering lower interest rates. In simple terms, you can move your outstanding loan from your current financial institution to a different lender offering better EMI rates.
- Compare before finalizing
There are tonnes of home loan providers that offer preferential home loan interest rates and flexibility in eligibility criteria. So, make sure you do your study before deciding on a home loan provider. The lower the interest rate, the better the deal. It might take a while to figure out which home loan provider has the best offers to give you, but you should take your time to save as much money as possible. You can utilize the saved amount on other upcoming expenses like setting up interiors, lawyer’s fees, and the upkeep/ maintenance of your new property.
- Monthly budget plan
A proper planned out monthly budget is considered the best way to keep the stress of paying your home loan at bay. So, you have to make sure a convenient and effective plan is chalked out by you to plan your monthly expenses as well as your home loan EMI. The principal loan amount, home loan interest rates, and loan tenure determine your monthly instalment plan.
- Shorten your loan tenure
Loan tenure plays a very crucial role in the process. The shorter the term of your loan, the lesser the EMI. People usually go for longer tenures- say 25-30 years, which increases overall interest payment. Going for a shorter loan tenure (10-15 years) will prove to be helpful for you to reduce your total home loan interest payable.
- Try paying more as the down payment for your new house.
The banks and other home loan providers usually offer loans up to 75-90 % of the property cost. The remaining amount must come through your own contribution. This excludes stamp duty & registration fees and other miscellaneous expenses. This depends on your home loan provider and their policies. But it doesn’t mean that you cannot pay more if you can. The more the down payment, the lower the loan amount, which will lead to lower home loan interest rates. This trick has helped a lot of new homeowners during the pandemic.
- Choose festive seasons for better deals.
During the festive season, the home loan interest rates are generally lower. So, keep your eye open during the festive season. Different home loan providers have offers going on during the festive season, which can also prove beneficial for you.
These are some tips and tricks you can use to reduce your home loan interest. Whether you choose to do a home loan balance transfer, shorten the tenure, do part payment or any other method, you must do it after careful evaluation. We hope you found it helpful and informative.