How to Reduce Home Loan EMIs?
Housing real estate prices are compelling homebuyers to use housing loans, as more than 90% of buyers cannot afford to buy a house with their savings. With a plethora of lenders in the market offering housing loans at competitive interest rates, homebuyers have a variety of options for financing their homes. Financial assistance, on the other hand, comes with the burden of monthly installments or EMIs. Larger loan amounts typically have higher EMIs and longer repayment terms of 20 to 30 years. Furthermore, if the lending institution raises the applicable interest rates, the burden on monthly expenses increases. (How to Reduce Home Loan EMIs?)
In the event of unforeseen circumstances, paying monthly EMIs can become difficult, negatively impacting the borrower’s credit score. To avoid such situations, most borrowers consider lowering their housing loan EMIs.
Here are some options for homebuyers to consider for Affordable Home Loans to reduce their EMI burden when repaying their home loan:
Loan Payment in Advance
- The interest rates charged by the bank have a significant impact on the amount of the loan. If a home buyer borrows 40 lakhs from a bank at 9% interest for 20 years, he will end up paying more than 43 lakhs in interest, bringing the total amount paid to the bank to more than 83 lakhs. Experts advise that if a borrower has cash, he should consider prepaying the principal amount, which will significantly reduce the EMI. When interest rates are low, a homebuyer should consider prepaying their Loans for Apartments.
Loan Transfer to a Different Bank
- Homebuyers may consider transferring their home loan to another bank that offers lower interest rates after comparing housing loan interest rates with other lenders. However, the new lender will treat your home loan transfer request as a new application and will charge application fees, processing fees, and so on. As a result, always compute the added charges and benefits associated with the new interest rates or tenure.
Consider EMI-waiver Programs
- Banks offer appealing schemes to consistent EMI payers by waiving some EMIs during the loan’s final phase. However, borrowers should exercise caution when considering such bank offers, as these loans may have higher EMIs than standard loans.
Increase your EMI payment
- If your earnings increase over time and you can afford higher EMIs, you can ask your lender to raise the EMI amount. As a result, homebuyers may be able to repay their Loans for Apartments much faster and become debt-free sooner. Even a slight increase in the EMI amount of 5-10% can have a significant impact on the overall payment to the lender.
Always be prepared to negotiate new loan terms
- The Reserve Bank of India (RBI) adjusts the repo rate – the rate that determines the interest rates offered by banks – in response to market conditions. Keep a close eye on new repo rates and re-negotiate your home loan terms with the banks, as banks may not adjust the lowered interest rates on their own.
Lenders such as Agrim Housing Finance provide Affordable Home Loans with low-interest rates that can be repaid over longer periods. Consider the housing finance company if you are looking to meet your housing finance needs with features such as a digital sanction letter and an easy top-up facility.
