How to reduce your home loan interest burden?
Did you know that most of the borrowers who are even eligible for home loan eligibility did not avail of a home loan facility? Yes, a majority of the home loan borrowers with home loan eligibility don’t apply for it because of the repayment part.
Yes, repaying an upcoming or active home loan could be a lengthy process as many people opt for a tenor as long as up to 20 years. While selecting a long tenor helps in paying lower EMIs, it also means paying more compounding interest rate.
Thus, if you have not worked on your home loan tenor, home loan EMIs can affect your monthly budget majorly for a long time. Therefore, to reduce the home loan interest burden, you need to know some relevant ways to help you do that.
Easy ways to help you reduce home loan interest burden
1. Opt for a shorter tenor
The first thing that you can do to reduce your home loan interest burden is by selecting a shorter tenor to repay your housing loan. Yes, opting for a shorter tenor may need you to pay more EMI amount, but it’s only for some time. A shorter tenor helps you repay your loan quick and also assist in saving on the compounding interest that you pay while opting for a longer tenor.
2. Go for frequent prepayment
Did you have the yearly performance bonus or salary increment or extra income from other sources monthly? Use the money to make prepayments towards the home loan so that you can reduce the principal and save on future interest payments. Nowadays, most of the lenders don’t charge for making prepayments for home loans.
3.Opt for home loan balance transfer
Are you an existing home loan customer who is paying a higher home loan rate? You can opt for the home loan balance transfer and switch your existing loan account from a lender charging a higher rate to a lender offering a lower rate. Your current lender may charge some fees for the same. Along with the home loan transfer, your new lender may also offer you a top-up loan of up to Rs.1.5 crore. You can use the top-up loan to cover your other needs at a lower rate and a longer tenor. You can also enjoy a 3-EMI holiday while doing the home loan transfer to an online lender so that you can arrange for the loan repayment.
4. Pay extra EMIs
Does your income allow you to pay one or two extra EMIs towards your home loan? If yes, you should go for it and help reduce the home loan interest burden.
Readjust your home loan rates
Ask your existing or prospective home loan financing company if they can offer you a lower interest rate if you pay them some money for it. Some lenders may do it. Thus, never miss a chance to ask them as asking takes nothing from you.
5. The Bottom Line
Some of the major tips to help you reduce your home loan interest burden are discussed in this post. You can make the most of it by starting to implement it.
Do you want to know more on how you can reduce your home loan interest burden? Click here!
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Don’t let the burden of large home loan EMIs weigh down your monthly budget. Learn how to reduce the burden of home loan interest, by implementing some simple suggestions.