Paying monthly instalments for a home loan can be a financial burden, leading to a disruption in budget. So here are some tips to reduce the interest rate on credit.
8 Tips to lower interest rates on home loan
Below are eight tips for borrowers to reduce their home loan interest rate:
- Select a longer tenor
Borrowers can go for a longer loan repayment tenor so that lenders can approve loan at a lower interest rate.
- Maintain a good credit score
If lenders see that potential borrowers have a good credit history, they can sanction their credit at lower interest rates.
- Go for annual EMI revisions
Borrowers can request creditors for a decrease in the interest rate on receiving a hike in salary.
- Opt for a balance transfer facility
Individuals can go for a balance transfer if they come across a lender that offers a lower interest rate on home loan compared to their current one.
- Try to prepay the loan
Part-prepaying the loan results in a lower number of monthly instalments and decreases the overall interest.
- Present proof of additional income
One can present proof of additional income to the creditors, assuring them to repay loan on time.
- Purchase home at a good location
Purchasing a home at a good location ensures lenders that they can sell it to raise money in case of default.
- Apply for a joint home loan
A joint home loan makes lenders believable that there will be no delay in credit repayment, and hence they can allow a lower interest rate.
Borrowers can use these tips to reduce interest rates on their home loan significantly. This allows them to increase their savings as the monthly outgo decreases.
