I was planning to opt for a home loan, but I wanted a low interest rate. To ensure that I am able to secure a low-interest home loan, I started doing some research on my own. During my research, I came to know about a few steps on how to reduce home loan interest. One of the easiest ways to ensure a low interest rate is to maintain a good credit score.
How to Reduce House Loan Interest?
Apart from maintaining a good credit score, you can also opt for a higher EMI. Doing so will help in paying the amount back to the bank faster and, thus, a low interest rate. Here are a few more methods.
Opting for a lower tenure will help greatly reduce the home loan interest rates. But doing this will increase the amount you need to pay as your monthly EMI.
Prepayment of loans is another method that you can follow. Doing this will also reduce the principal amount and, therefore, the interest amount. However, some banks have prepayment charges.
Paying more down payment is another path that you can choose. This will reduce the principal loan amount, thus reducing the overall interest.
And that is how to reduce the interest rate on home loan. I hope this helps.
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Home loans and interest rates are long term commitments and sometimes you feel like breaking out of the pattern and finishing them off early or simply reducing the burden. I have been thinking about the same lately. I am earning better and thankfully in a much better place financially so I was wondering how to reduce interest on home loan. So I asked my CA about the same. He told me about a few tricks. I can share them with you.
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Here are a few things he suggested:
Prepayment: If you have taken a home loan on floating interest rates then you will not be charged for prepayment or even home loan foreclosure so you can do that. However if you have a fixed interest rate then you will have to pay some charges but that is bearable coz you are looking to reduce the overall home loan interest rate anyway.
Balance transfer:Once you have started making prepayments you can transfer your home loan to another bank that gives attractive interest rates, i.e, lower interest rate than what your current lender is charging. It will be a lengthy process but you can end up saving lakhs on interest rates.
Revise your installments:So there are a few lenders who allow you to revise your EMI structure annually. You can go for them and switch to a higher EMI amount to reduce your loan tenure and home loan interest at the same time.
So these are a few tricks on how to reduce home loan interest rates.
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How to reduce home loan interest?
Ishita
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2021-11-30T15:00:03+00:00 2021-12-03T13:55:32+00:00Comment
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