A home loan is a long-term commitment. The approval of a housing loan is given only to eligible customers who can repay on time.
Many borrowers wish to reduce home loan EMI burden and save for other expenses, but they are not.
If you wanted to apply for home loan or an existing borrower, you could quickly reduce your home loan EMI burden. How? Go ahead and follow tips as discussed in this post!
- Make a higher down payment
You may have an idea that none of the lenders approving your home loan application will approve the total cost of your new home. The maximum that they can sanction is up to 75-80%. The remaining 15-20% has to be arranged on your own. It is known as the down payment. The higher is your down payment amount, the lesser will be your borrowable figure. In turn, it can help you pay the reduced home loan EMIs, and even save on interest charges.
- Negotiate with your lender for better terms
If you already have an active housing loan account and want to lower down your loan EMIs, you can consider negotiating with your lender. If you have made timely repayments so far, your lender may readjust your loan’s terms and conditions. This way, you can pay the reduced home loan EMIs and save.
- Go for a longer tenor
Another thing that can help you bring down your home loan EMI is to opt for a longer tenor. The longer is your tenor; the smaller will be the loan EMIs. Once done, you can make timely repayments because of the lower amount. In turn, it will help you have a robust CIBIL score. The only demerit of a long tenor will be that your home loan interest rate charges will go up.
- Make prepayments during the loan tenor
Leading lenders have made the facility of making prepayments for your home loan account during the tenor. If you do that from time to time, you will have no issues in bringing down the loan amount, the interest costs. It will also reduce your home loan EMIs. The only thing to check is if your lender levies any extra charges for making prepayments. Most reputed banks and NBFCs in India don’t charge prepayments.
- Apply for a joint home loan and share the cost with a co-borrower
Applying for a joint account not only increases your home loan eligibility. But, it also helps you share the EMI burden. Since the EMI amount gets divided between two people, it becomes easier to manage a lower amount.
- Consider switching your home loan account
If none of the tricks works to reduce housing loan EMI amount, you can consider switching your loan. Yes, you can always switch your current home loan account to a lender offering a lower rate of interest. It is called the home loan balance transfer. Under this, you can transfer your ongoing loan account to a new lender. This way, you can enjoy lower interest charges and save on EMI repayments. But, before doing that, you should check out the processing charges of your existing and new lender. If it is more than what you will save, then it may not be worth the efforts. You can also use the home loan balance transfer calculator to estimate costs and savings. One of the significant benefits of the home loan balance transfer is a higher top-up loan. Renowned banks and NBFCs in India offer the top-up loan facility. You can use the top-up loan amount for anything as per your preferences. It comes at a lower rate and a tenor, almost that of your home loan. Hence, it is an inexpensive version of a personal loan to cover your every need but at a lower cost.
Many people strive to save on EMI repayments so that they are able to take care of other outlays in their lives easily.
If you can consider any of the discussed elements as per your preferences, you will be able to reduce your home loan EMI burden.
You can also get in touch with a financial expert to get a consultation about which method is apt for you.