Looking to Lower Your Home Loan Interest Rate? Here’s How You Can Do It!
For many, there is no bigger dream than stepping into your dream house after years of hard work. This is especially true for people who have stayed in rented homes for a long time. But people these days don’t wait until you have a lump sum to pay to buy a home. Many depend on home loans.
Now, you need to consider various factors when applying for a home loan. Home loan interest rate is one such factor that can have an impact on the loan’s monthly instalments. Read further to know how to get a good deal on your housing loan interest rate:
- Consider a higher down payment
One of the most effective way of lowering your interest rate of your housing loan is to make a higher down payment. Many borrowers try to get the lender to cover most of the property cost in order to give the minimum down payment. But, in such a case, the lender may charge a high interest rate as they are lending a bigger loan amount, which increases their risk.
- Choosing a short repayment tenure
Choosing an ideal repayment tenure can make a huge difference and also impacts the interest rate of the loan. Borrower prefer to choose a maximum tenure to keep EMIs at a minimum.However, it is recommended to go for a short repayment tenure if you want to save on the interest outgo. If EMIs are less in number, interest payments do not add up, as you will be repaying the entire loan in fewer instalments. Consider using a home loan calculator and to get to a convenient tenure for loan repayment.
- Transfer of the loan
If you already have a home loan that you are repaying, you could consider transferring that amount to another lender, which offers a lower interest rate. Make sure to consider home loan balance transfer in the beginning of the tenure so that you do not lose out on any benefit overall deal.
- Increasing EMI payments &Investment
Your salary will increase as you grow in your career, which in turn improves your repayment capacity as well. In such a case, you can plan to increase you EMI payments. This will help you reduce the number of EMIs and help in faster loan repayment. Moreover, investing after taking a home loan can also help with prepayment after one or two years if you are able to build a decent corpus.
Getting a lower interest rate is something that you should give great importance to when you apply for a home loan. Thanks to the internet, it is easier than ever to do research and consider the interest rates of different lenders. Additionally, you opt for a home loan balance transfer with anew lender offering lower interest rate. You can also make use of home loan interest calculator to help you compute the EMI in order to plan your finances well.