Usually, Home Loans is a package of a big amount and longer repayment tenure. Reducing home loan interest payment is something that should be considered seriously. If one is able to reduce the interest rate on monthly basis, On a whole, it would surely help in sizeable saving. A reduction in interest rate leaves a positive impact on borrowers.
RBI started reducing interest rate Since 2014. There has been an overall reduction of 175 basis points (adjusting the last hike of 25 basis points).
Following Three simple step will surely help to reduce interest on Home Loans:
Step 1: Higher Down Payment:
One of the best ways to reduce the interest rate is to make a higher down payment of loan amount. It can be helpful in reducing the Principal Amount. Lower the Principal Amount Lower the Interest Rate. The benefit of higher down payment is borrower saved mortgage interest.
Step 2: Alter EMI:
A salaried person’s income most probably increases every year. It could be beneficial to add some more percentage of income to return the loan amount and decrease EMI tenure. The borrower may not feel the impact in an early stage but the fact is that interest burden decreases as the tenure increases. This work in favor of the borrower.
Step 3 Home Loan Balance Transfer:
Home Loan Balance Transfer is another way to reduce Interest Rate. If a better home loan offer is come across from another lender, then it is worth considering a home loan balance transfer. There are some important points needs to consider before applying for a home loan balance transfer. Which we already discussed in our earlier post “What’s More Beneficial? Home Loan Balance Transfer or Top-up Loan?”
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