How To Reduce Your Home Loan EMI - TecnNo Ritesh

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Wednesday, September 18, 2019

How To Reduce Your Home Loan EMI

How To Reduce Your Home Loan EMI
To reduce your home loan EMI, the first thing you should do is to choose a lender who offers a home loan at a lower rate of interest.

How To Reduce Your Home Loan EMI


Whenever you take home loan, interest rates payable and tenure loan comparable monthly installment (EMI) amount are the main reasons you have to pay. Here are some ways how a new or existing home loan borrower can effectively reduce their home loan EMI burden.

Here are some ways how a new or existing home loan borrower can effectively reduce their home loan EMI burden.

  1. New Home Loan Debtors

To reduce your home loan EMI, the first thing you should do is to choose a lender who offers a home loan at a lower rate of interest. However, exploring how you can take out a home loan, and from which lender, can be a daunting task. Also, at that point you may not be able to figure out which lender is offering a good home loan deal. Here are some tips that can help you get a better deal on home loans and in turn reduce your EMI payments.

A. Compare Rates Online

Nowadays, the best ways for home loan lenders to check home loan offers is to go online. There are various websites online portal which give a summary view of interest fees and other cost to different lenders. Therefore, do your research to ensure you get the best deal before availing a home loan

B. The longer the term chosen for the longer payment term on your loan,

the lower your EMI payable will be each month. However, you should only opt for a longer loan repayment period if you feel you cannot afford to pay higher EMIs. When you opt for a longer term, you end up paying more interest on your home loan balance.

You can comfortably pay every month than you pay for your EMI but try to raise more. Therefore, choosing a home loan term carefully will have these effects because of the EMI amount you have to pay each month.

In the early years, your disposable income would be shrinking to pay off higher EMIS. However, you will find it easier to pass the EMI amount over time as time goes by, usually because a person's income increases because he / she is in a career.

C. Make a big down payment

As a home loan lender is allowed to fund up to 80-90 percent of the property value, getting a home loan viewed is a 10-20 percent minimum contribution as a down payment. However, instead of just managing the down payment, it will be practical, forward-looking to provide a higher contribution from your own pocket.

How To Reduce Your Home Loan EMI


2. Existing Home Loan Lenders

If you find good interest rates for existing home loan lenders and reduce your EMI payments, even if you can adopt a specific strategy to reduce your home loan EMI and reduce debt burden. How to reduce your interest payments on a current home loan Terms of Service with Negotiate Current Lender If you have maintained a good relationship with your current lender, you can negotiate home loan service terms. This way you may be able to get a lower interest rate on your loan amount. Make a home loan prepayment period

A. Refinance your loan by refinancing your loan

If you think you are getting a loan at a higher interest rate, you always have an option for refinancing it. Banks generally offer a rate based on the MCLR of interest (based on the Landing Rate Fund Marginal Cost) regime that provides the lender different from the lender. In such a scenario, you can switch to another lender offering better rates.

The MCLR rule allows banks of the Reserve Bank of India (RBI) to set up their own MCLRs based on their marginal cost (which means the cost of raising new funds for the bank). In this regime, predetermined loan reset dates depend on the current rate at the date on which the loan's reset date arrives, to ensure that the loan rate reset (MCLR) changes during the loan term.

B. Terms of Service with Negotiate Current Lender 

If you have maintained a good relationship with your current lender, you can negotiate loan service terms at home. This way you may be able to get a lower interest rate on your loan amount.

C. Make Time Home Loan Prepayments

By the time your spare money is left at your bank, you should try to make a prepayment for your home loan before the end of its term, as it may reduce the overall interest payment. You can get this surplus amount of your annual bonus, prepaying some of your loan from any investment made earlier etc. will reduce the total loan balance and so on, total interest payable. As a result, either your EMI amount can be reduced or the payment period can be reduced. Generally, lenders allow you to prepay your home loan balance either in parts or completely. You can prepay some of your loan if you can reduce your EMI payments by negotiating with the lender where you must ask the lender to reduce the total loan repayment term and reduce your EMI amount instead.

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