Home is a basic necessity. The majority of the people try to get a home loan so that they can buy a home for their family. Note that when you are going to repay a home loan, then this can be a lengthy process. You can choose a tenor of up to 20 years. But it this not worked out properly, then your home loan EMIs can affect your monthly budget for a long period. For reducing the burden, you should find out the ways for decreasing your home loan interest.
Keep two important things in your mind:
1-Find out the right lender that provides the lowest interest in the market, 2- Make sure that your lender will give you MCLR-linked interest rates that reflect the lowest prices faster.
4 Tips to Reduce Your Home Loan Interest
Now, we will be looking at the tips that will help you to Reducing Home Loan Interest:
1-Pick A Short Tenor
It is better to pick a short tenor because more time means more interest. So, by selecting your home loan tenor you can save yourself in a great way. You should use a home Loan EMI calculator to get an idea. Furthermore, you should adjust the tenor of your loan to arrive at the maximum EMI that you can easily pay each month.
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2-Make Regular Pre-Payments
It is important to note that the EMI for a home loan consists of two parts. One is the interest charged on the borrowed sum and the principal. For your information, during the first few years of repayment, you can pay more towards the levied interest and less toward your principal. During this time, it is best for you to make part prepayments when you can easily use your work bonus, salary hike, and other income. Some lenders may allow you to part prepay your home loan without charging any fees. This will help you in reducing the principal and will also reduce the total interest levied on you.
3-Revise the EMI Payouts Yearly
Note that some lenders will allow you to revise your EMIs on an annual basis. Once you get a salary hike or experience a consistent increase in your income, then you can increase your EMI amount. For every 10% increase in income, your EMI payment will increase by 5%. A regular reworking of the EMI looks like a small shuffle but with every increase, there will a decrease in your tenor and this will reduce your home interest rate.
4-Get Home Loan Balance Transfer
If your home loan is at higher interest in comparison to what other lenders are offering now, then you should think about refinancing your home loan. For instance, a Home Loan Balance Transfer will provide you a more affordable interest rate along with a 3 EMI holiday. Furthermore, it will give you access to a low-interest top-up loan.
By following these factors, you can easily repay Reducing Home Loan Interest. Do share your thoughts on these pointers!