Home loans enable individuals to avail the necessary funding for the purchase of a residential property conveniently. Nevertheless, prolonged tenure, coupled with high interest rates, can result in substantial EMIs, which can create a financial burden for borrowers.
Consequently, Individuals can follow the steps below to lower their housing loan EMI –
Make a higher down payment
New borrowers can consider making a higher down payment which will reduce the overall home loan amount. Accordingly, lending institutions will also charge a lower interest rate considering the borrower’s financial stability, thus resulting in lower EMIs.
Opt for home loan balance transfer
Existing borrowers can consider switching their outstanding home loan amount from their current lending institution to a new lender for an interest rate reduction, which will lower the overall home loan instalment amount. However, borrowers should only consider opting for a home loan balance transfer if the difference between interest rates offered by the current and new lending institution results in a significant liability reduction.
Make part-prepayments
Borrowers can also consider making part prepayments on their home loan if possible. It will reduce the overall outstanding loan amount, which will result in a smaller housing loan EMI amount.
Negotiate with the lending institution
Individuals who are on good terms with their lending institution with a positive repayment history and high credit score can consider negotiating with their lender for a lower interest rate on a home loan.
Additionally, before availing a home loan, borrowers should research on the interest rate and other service terms on home loans offered by different financial institutions. They can also use a home loan EMI calculator to compare loan offers by various lenders and select the most affordable EMI option on the housing loan.
Read Also: Steps to Lower the Housing Loan EMI
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