Availing a housing loan is a crucial financial decision as it comes with a repayment responsibility for an extended period. However, while availing a loan one may have opted for a lending institution providing it at a high interest rate, which has resulted in a significant financial strain. Therefore, they should know these steps to lower their home loan EMI –
Negotiate with your lending institution –
If you have a positive repayment history, you can use it to negotiate with your lending institution to lower your current interest rate, which will ultimately reduce your EMIs.
Request for a loan tenor extension –
You can also request your lender to extend your home loan repayment period, which will ultimately bring down your EMIs. Nevertheless, an extended tenor also comes with increased interest accrual. You can thus use an EMI calculator for home loan to assess how much EMI as well as interest you will pay if your repayment period is extended and decide accordingly.
Switch to floating interest rate
If you have been paying interest on your home loan at a fixed rate, then you can consider switching it to a floating interest rate which is linked to an external benchmark rate and varies accordingly. Therefore if the market trends indicate a rate reduction, it can affect the floating rate accordingly. Thus, when the interest rate is low, borrowers also end up paying a low house loan EMI amount and save substantially.
Opt for a home loan refinancing
If your current lending institution is unwilling to negotiate for lower interest rates, then you can explore refinancing options like balance transfer to avail better interest rates and terms for home loan EMI reduction.
Prospective borrowers should also make sure to compare interest rates and terms offered by various lending institutions before applying for a home loan.
Also Read: Tips to Efficiently Manage Housing Loan EMIs
