Steps To Lower Your Housing Loan EMI Amount
Even though home loans come with an affordable rate of interest, the high principal can lead to expensive EMIs, which can be burdensome on one’s limited monthly income.
Each EMI comprises a principal component and an interest component as per the applicable home loan interest rate. Effective management of the repayable amount can thus result in EMI reduction, and ultimately a reduced repayment liability.
Check out the following tips to do so –
Opt for prepayment of advance when funds available in a lump sum
Prepayment facilities like foreclosure and part-prepayment allow borrowers to repay the loan amount in full or part. While in the former, it results in savings on the outstanding interest payable, under the latter, one can effectively bring down your Bajaj Finserv home loan EMI. Therefore, prepayment can give you benefit in interest rates.
Transfer home loan balance to another lender
Balance transfer facility allows for a decrease in total interest payable. You can opt to transfer the existing balance of your home loan to another lender, offering a lower interest rate.
Choose a longer repayment tenor
A longer tenor for repayment distributes the principal and interest quantum over more number of months, thus reducing EMIs. Nevertheless, when looking to save on interest payable, it is ideal to opt for a shorter tenor as it reduces the cost of the loan.
Keep a check on market trends regarding changes in home loan interest rate
Remaining updated on changing market trends allows you to benefit from consistent interest rate reduction over time. You can then transfer your loan to another lender, offering a reduced interest rate.
Take into account these tips to reduce your EMI liability and manage your home loan efficiently.
