Availing a home loan from HFCs has become convenient, thanks to relaxed eligibility criteria. Borrowers searching for a substantial fund to purchase a residence or invest in home construction can apply for a home loan. Nonetheless, EMI repayment and interest payment is a monthly exertion.
This repayment burden can be tackled efficiently by employing specific ways for healthy savings. Individuals can compare different lenders in the market and opt for the competitive interest rate to reduce home loan EMI amounts.
Tips to reduce the EMI repayments on your home loan
Go for a longer tenure
The repayment tenure significantly affects EMI and interest cost. One can reduce monthly instalments if an individual can opt for a longer home loan tenure. Nevertheless, it is essential to know that longer tenure can increase the burden of interest payment. Hence, this option should be chosen when an applicant is comfortable to repay a high interest rate.
Make a substantial down payment
Applicants can increase the down payment to manage the EMI of a home loan. Through this process, a borrower can efficiently pay a substantial loan amount and reduce the outstanding balance. Moreover, this also helps to maintain low LTV ratio.
Estimate the EMI before applying
Borrowers should calculate the payable amount before opting for a home loan. This will help in understanding one’s capability of EMI repayment. In such scenarios, using a home loan EMI calculator can be helpful. With this tool, borrowers can estimate their instalments by entering interest rate, principal amount and the suitable tenure.
Opt for loan refinancing
Financial institutions set their loan interest rate based on the current lending rate or Repo Rate of the RBI. Hence, existing borrowers who pay a higher interest rate against the home loan can opt for refinancing. Choosing a lender that offers a reasonable home loan interest rate helps in reducing EMIs significantly.
Try negotiating with your lender
Individuals who maintain a 750+ CIBIL score can negotiate with a lender regarding interest rate reduction.
Opting for these steps can help an individual to save significantly on their disposable amount.
