Since a home loan is a long-term obligation, many people want to reduce their EMI burden. They try doing that using different tricks. If you are an active home loan customer or want to apply for one, you can lower down the home loan EMI. Yes, it is possible after following a few handy tips.
Read on and know more!
Tips to reduce home loan EMIs for current home loan customers
Renegotiate with your lender for better loan terms
The first thing is to approach your lender and inform it about the lowering home loan rates in the market. You should convince that even you should get the advantage of it. Tell it to readjust your loan rates. If it does, you will be able to pay the lower home loan EMIs.
Refinance your home loan
If your lender does not oblige to readjust their lending norms, you can go ahead with the home loan balance transfer. The home loan balance transfer facility helps you switch your current loan account to a lender offering a lower rate. Once done, you would be able to pay reduced housing loan EMIs. You can also benefit from a high-value top-up loan available when you switch your loan. Under this, you can get a considerable amount at a lower rate and a tenor of your current home loan. A top-up loan may help you cover your needs without restrictions from lenders.
Make prepayments during the tenor
It is also possible to bring down your home loan EMI by making prepayments from time to time during the tenor. You can also pay extra EMI payments to lower your principal and pay the smaller home loan EMIs.
Tips to lower down your home loan EMI if you are a new customer
I) Pick the right home loan
Opting for the right home loan is the key to paying reduced home loan EMIs. You should pick a home loan offer from a lender matching your needs and budget. To do that, you should shop around on a third-party website. This way, you can choose a deal matching your needs and repayment capacity the best. It is available on a third-party platform for free and could be accessed round the clock.
II) Go for a large down payment amount
Most lenders may finance up to 75-90% of the value of your new home as a loan. The remaining needs to be arranged on your own. It is what is known as the down payment. But if you choose to put down 30-40% or even more as the down payment, you would be able to bring down your home loan EMI significantly. It is because you will have to borrow lower. The lower is your borrowing figure; the lesser will be the housing loan EMI amount.
III) Choose a longer tenor
Home loans’ tenor may range up to 20 years or more as per the policies of your lender and your home loan eligibility. If possible, you should apply for a longer tenor. Why? It will stretch the home loan amount and help you pay the reduced home loan EMIs. The only minus point of going ahead with a long tenor will be higher home loan interest charges.
IV) Increase your EMI amount
We are discussing tips to reduce your home loan EMI, but this pointer is about increasing your EMI figure. What’s the deal? If you have switched your job recently with a better payout, or have received a pay raise, you can pay the higher loan EMIs. Yes, many creditors may allow you to revise your EMIs on a yearly basis. After you start paying higher EMIs, the tenor of the loan will also come down.
Once that’s reduced, the overall interest rate you need to pay against your debt will come down. Hence, the first thing is to check if your loan provider offers such alternatives or not.
Be it an existing or a prospective home loan customer; it is always possible to lower down your home loan EMIs. The only thing you have to do is – consider the discussed tips, and follow one as per your needs. Read More Business articles.