Home Loan Tips: The hassle of Home Loan EMI will end, try these 5 methods..

Home Loan Tips: RBI has recently announced a cut in the repo rate in its April Monetary Policy Committee (MPC) meeting. This is a relief news, as it will make it cheaper to take a home loan and your monthly installment (EMI) will be reduced. Currently, the interest rate of home loans is between 8% to 12%.

However many people have questioned whether they can reduce the EMI of their home loans. Let us tell you that this is possible. According to experts, if you take care of certain things during and after taking a home loan (Home Loan EMI), then you can easily reduce your EMI, for this, we are going to tell you some easy steps in this article...

Take a short-term home loan -

Your EMI depends on the loan amount, interest rate, and loan term. The loan term has a direct impact on the EMI. A short-term loan allows you to repay the loan in less time, which reduces your total interest. However, the EMI of a short-term loan is slightly higher. On the other hand, a long-term loan allows you to pay a lower EMI, but at the same time, you have to pay a higher amount of total interest.

Use prepayment wisely -
In the initial years of a home loan, a large part of your EMI goes towards paying interest, while the payment on the principal is less. In this situation, if you have extra money, then it is beneficial to make a prepayment. By making a prepayment, your principal amount gets reduced, due to which you have to pay less interest in the future and the loan tenure also gets reduced. By making a prepayment, you can reduce your loan burden and become a homeowner soon.

Compare interest rates online -

The decision to take a home loan is an important decision in life. Before taking this important decision, you should thoroughly check the interest rates of various banks and housing finance companies available in the market. There can be a lot of differences in the interest rates offered by different institutions (Home Loan Interest Rate). Therefore, it is very important to compare different options. Apart from this, you can also reduce the interest rates by talking to different institutions.

Option to refinance home loan -

When you take a home loan from a bank, customers often get the loan at a higher interest rate. Due to this, if the interest rate of your bank is high, then you can think of transferring the loan to another bank at a lower interest rate. There is no penalty for transferring the loan in a floating rate loan, but it is important to calculate the processing fee, legal charge, and other expenses. If these expenses are less than the benefits of loan transfer, then the decision to transfer the loan will be wise.

When you take a loan for a house, you have to make a down payment of 10% to 20% of the total loan amount. This amount is a part of the total cost of the property you have chosen which you pay yourself, and for the remaining amount you take a loan from the bank. In this context, the best way to reduce the EMI of home loans is if you can make a higher down payment, which will have a good impact on your EMI.

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