While the accessibility of home loans has increased in recent times, a high home loan interest rate can become an obstacle while availing the advance. Several factors like eligibility criteria, interest rate, loan amount, tenure, etc. tend to influence EMIs and in turn, influences a borrower’s repayment capability.
Nonetheless, there are smarter ways to lower the burden of home loan and manage EMIs. Following these tips will help a borrower to repay their loan amount without hassle.
Tips to reduce your home loan burden
1. Opt for a high down payment -
A borrower needs to make a down payment of about 15% to 20% of a property’s value before availing a home loan. Individuals making a higher down payment can reduce their repayment burden significantly.
2. Choose a long tenure -
An extension of tenure ensures a lower EMI, which can also be defined as reorganising the written norms. Depending on one’s financial strategy and repayment capability, he/she should pick a tenure that makes repayment more manageable.
3. Prepay the amount -
One of the smartest ways to manage the loan burden is to pre-pay the amount in part or full. This will enable you to save on your interest payments. Further, an individual must always check the lenders and decide the one offering low pre-payment charge and penalty.
4. Balance transfer -
Home loan borrowers can lower their instalment amount by negotiating with their lender or opting for an outstanding balance transfer. This process is accessible and profitable in terms of saving, but a nominal fee has to be paid for such transfer. An individual must know why to choose a home loan balance transfer to avoid future troubles like unwanted debts.
Read Also: Ways to Reduce Your Home Loan Burden
Apart from following these steps, an individual must try to improve his/her overall credit history to avail exclusive benefits and lower home loan interest rate.
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