Home loans are the greatest liabilities anyone can commit to in their lifetime. Home loans are one of the trickiest and longest ongoing loans that one secures. As a result of which, most home loan seekers are always researching newer methods to reduce their EMI (equated monthly installments).
EMI can often get very stressful for individuals who have secured home loans. Here Are 7 ways you can reduce your home loan EMI amount and reduce your stress by a notch.
-
Select Shorter Tenure for EMI
The tenure of your loan is one of the factors that place importance on how much your EMI rate is going to be. Therefore, it is advised that you shall always go for a longer EMI tenure. This factor will make sure to cut down your EMI amounts. Therefore, before you select an EMI tenure, select the tenure wisely.
-
Try to go with Prepayments
Banks do not charge for prepayments or floating-rate loans. Therefore, if you have secured a loan, be sure to make prepayments from time to time. You can use a home loan interest calculator to calculate the EMI you will require to pay if you choose a particular tenure.
This is done for the first few years of your loan payment; you pay more toward your interest in comparison to the installments that you pay later. Therefore, if you make prepayments, it will reduce your principal amount by a subsequent rate.
-
Compare Interest Rates
It’s Always advised for individuals to research before selecting and moving forward with a loan procedure. You should research and compare the rates that are provided by different loans. Various third parties may give you a better insight into the rates and the charges of several banks.
-
Balance Transfer Alternative
The balance transferring alternative comes into the picture only if you have already moved forward and started making the payments to your loan.
If under the impression you get the slightest hint that your current bank is charging higher interest than any other bank, you will also have the option to move or transfer your loan to another bank.
-
Down Payment
Most banks present a total of 75%-90% of the total value of the property that you want to buy or build. You are required to pay the remaining amount by yourself. Therefore, it is always a wise decision to pay the major chunk from your pocket as much as you are comfortable with so that it reduces your EMI payment. You can further select home loan balance transfer to select the desired balance you want.
-
Research Better Deals
You can always research and look for better deals. You should move forward with a bank that has a recent history and background with its clients. If your credit score is higher than 800, you can secure good deals on your goal.
However, if your credit score is below 800, there might be some issues for you on the path order to securing a good loan. Apart from that, you must also look closely at festival offers as banks tend to give extra concessions during the festival season.
-
Increase EMI
The banks allow you to reform your installment annually. On occasions where individuals have secured a job paying a higher salary, you can always select a higher EMI as an option to eventually reduce your EMI tenure. Once the tenure of the EMI reduces, this, in turn, reduces your EMI amount.
You can always check out Standard Chartered Bank’s Home Saver Loan. It is a variant of the home loan and allows borrowers to deposit their excess savings into an overdraft account that is linked to their new home loan accounts. With Home Saver, you can fast-track your prepayment at 7.90%.
To Conclude
These are a list of factors every individual should consider before they move forward with their home loans. These are the few tips we discussed that will help you reduce your EMI rates.
