How to reduce HDFC home loan interest rate?

When I wanted to figure out how to reduce home loan interest rate in HDFC, I went straight to the bank manager for guidance. I needed this sorted quickly. The manager was patient and gave me some amazing tips. Some include choosing a shorter term, making a large down payment, and so on. Read on to know more.

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How to Reduce Interest Rate on Home Loan HDFC?

Here are a few tips my bank manager gave.

• Choose a Shorter Term: The manager suggested opting for a shorter term, like 10 or 15 years instead of 20. This helps in paying less overall interest. I wish I had considered this earlier.

• Make a Larger Down Payment: He explained how a larger down payment would reduce the loan amount and ‌the interest rate. I will definitely keep this in mind.

• Transfer the Balance: If the current rate feels high, transferring the loan balance to a lender offering lower rates can help. The manager showed me how this works and gave me options to compare.

• Prepay the Loan: Prepaying part of the loan was another suggestion. He told me it’s most effective in the early stages of the loan. I started planning small prepayments to ease the interest burden.

• Use HDFC’s Conversion Facility: This was one of the best tips. The manager explained HDFC offers a conversion facility, where you can lower the rate by switching schemes or spreads for a nominal fee.

I hope this helps you understand how to reduce tenure of home loan in HDFC.

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Home Loans from HDFC housing finance are available to all types of buyers of residential property. I have seen that they come with exceptional features and advantageous interest rates. You will be eligible for a loan through the HDFC House Loan. And the interest rate is determined based on the risk associated with the kind of property being used as security. But you must also think of reducing the home loan interest rate if you can’t afford it. So let me tell you how to get HDFC home loan interest reduced.

How to make HDFC reduce home loan interest rates?

1) Choose a shorter term

Your loan term is one of the main elements determining the interest you must pay, as was previously indicated. While shorter tenures, like 10 to 15 years, may assist lower the overall interest payable, longer tenures. But 25 to 30 years will decrease the monthly instalment amount. In order to avoid paying greater interest on your loan, take time to consider the tenure before applying for a loan.

2) Home loan balance transfer may be an alternative

Once you have begun making prepayments on your loan, then the balance transfer becomes an option. You can transfer the remaining outstanding amount to a bank or lender with a reduced interest rate. You can do it if you think the interest rate imposed by your current lender is a little higher than you would like. This is one of the main methods how to reduce HDFC home loan interest rates.

3) Pay a larger down payment

Typically, 75% to 90% of the total property value is financed by banks and other financial organisations. The leftover cost of the property, between 10% and 25%, is your responsibility. The best course of action is to make a larger down payment rather than paying the least amount possible. The loan amount decreases directly in proportion to the initial payment made, which also lowers the amount of interest that must be paid.

I hope you understood how to make HDFC home loan interest reduced.