Not being able to repay your house loan EMIs conveniently? Perhaps the rate of interest on the loan is too high. In that case, it’s time to reduce your interest burden to repay the loan easily. Here are 5 useful tips for that.
Choose a Short Tenure
If you predict that your salary or overall income will increase periodically, you can repay the loan sooner. In that case, you can go for a short loan tenure. Then you would be paying interest for a shorter duration. A top bank for home loans offers industry-best interest rates. So, even if you choose a brief tenure, you need not pay hefty EMIs since you can save on the interest paid on the principal amount. Just to be sure, consider using the home loan EMI calculator and settle for payable EMIs by entering the loan amount, interest rate and the chosen tenure.
Negotiate with the Lender
If you have a high credit score and/or good income, you can apply for a home loan with a lower interest rate. That’s because the lender will assume that you’re responsible and financially stable enough to make loan repayments regularly on time. So, consider using your income proof and credit score to this end.
Moreover, you’ve been loyal to the bank and maintained a good relationship with timely loan and credit card bill payments earlier, you’ll be in a better position to negotiate a lower interest rate with the bank. Then check the rate using the home loan interest rate calculator on the bank’s official website.
Make a Prepayment
If you prepay a part of the loan, the number and amount of EMIs get reduced. Plus this way, the interest burden will also go down. So, you can save on your house loan EMI payments and clear them easily and faster. The best bank offers home loans at floating interest rates so that there are no prepayment charges. On choosing such a bank, you can save on these charges too.
Make a Large Down Payment
With time, as you get salary hikes or your overall income goes up, you can try a large down payment too. Then you can receive various benefits like:
- Higher creditworthiness
- Lower principal due to which not only the interest but also the remaining EMIs or tenure, processing fee and other associated charges would go down
What’s more, if you make a sizeable down payment, you may get access to a lower home loan interest rate. After that, use the home loan EMI calculator to check the instalments left to pay.
Choose Balance Transfer
Another way to reduce the interest burden is opting for a home loan balance transfer to the bank offering a lower interest rate and other benefits. Then again you can save money on your loan repayments.
Follow the above tips to reduce the interest you need to pay on your house loan. After the lender accepts your request, check the new EMI amount using the home loan EMI calculator on the bank’s website.