Home Loan Interest Rates Falls Below 7% – 5 Best Ways to Reduce your EMI Burden
The thought of owning your dream home is nothing short of elating. However, the huge financial obligation that it carries can dampen your spirits and make you procrastinate. Fortunately, there is absolutely no reason why you should not pursue your dream. Home loans are offered by top lenders with the best conditions. The interest rates levied through the loan have fallen to as low as 6.7%. This is majorly driven by the repo rate cut that was announced by the Reserve Bank of India.
Safe to say, there is no better time than now to get your home loan. If the low home loan interest rate wasn’t enough, there are several other ways through which you can reduce your home loan EMI liability. Read on to know the best tips to reduce your EMI burden and ensure a smooth home loan procedure.
5 Tips to Reduce the Home Loan EMI Cost
- Make Part Payments – There may be several instances when you receive extra funds in the form of an annual bonus, proceeds from an insurance policy or interest payouts. You can use these funds to direct them towards making part payments against your home loan. Doing this will help you reduce your home loan EMI cost. The regular practice will also reduce your home loan tenure and bring big interest cost savings.
- Pay Bigger Home Loan EMIs Initially – Paying an amount bigger than your actual home loan EMI is a good way to reduce your home loan EMI costs. While you may think that this is contrary to the stated tips, making bigger payments initially will bring down your costs over the months. There could be months when you have funds left after your expenses and you can make the bigger payments during these months.
- Seek a Lower Interest Rate – The interest rate levied on your home loan is a driving factor that determines the cost of your EMI. If the rate of interest is high, so will be the EMI. On the other hand, a lower home loan interest rate will significantly bring down the cost of your EMI. You must strive to maintain healthy credit to ensure a competitive interest rate on your home loan.
- Pay an Extra EMI Annually – You can follow a healthy ritual of paying off one extra EMI annually. This way you can ensure a tighter hold on the interest outgo. The extra EMI aids to effectively bring down the total principal cost. Thus, you can close the loan quicker than you intended. Most lenders would not stop you from making an extra annual EMI.
- Request for a Tenure Extension – In case you find yourself amid financial stress, you can request the lender to extend your home loan tenure. This will reduce your home loan EMI cost and help you successfully manage your account. However, do not resort to this option unless you are in an absolutely tight situation. Extending your tenure will bring down your EMI, however, you will have to in turn make the repayments for a longer period.
Home Loan Account – Should you Consider a Switch?
If you are stuck with a home loan that does not bring you the best deals, you can consider a switch. Evaluate whether the move brings you a reduced home loan interest rate. As per financial experts, the other lender must offer you a 50 basis point lower interest rate and the pending loan tenure must be more than 15 years. If the answer to both these aspects is a yes, then a home loan account switch is a viable move.
Obtaining a home loan is one of the best ways to fulfil your dream of owning your home. The systematic repayment plan through EMIs and reduced home loan interest rates help in easily achieving your much-desired goal. Ensure that you get a home loan through a well-reputed financial organization as the terms and conditions are much more favourable. Visit Finserv MARKETS to get the best interest rate on your home loan offering and enjoy the best quote on your deal.