So you've finally found a place to call home! So far, everything has gone well...
The next thing on your mind is to find the best home loan. When it comes to securing a house loan, one of the most important considerations is the interest rate.
Recently, there has been a decrease in interest rates. Because this is such a large investment, even a small fluctuation in interest rates can make a big difference.
Let's take a look at some of these clever strategies for lowering your home loan interest rates.
Shorter Home Loan Duration
Although a shorter term will increase your EMI, it will ensure that your principal is paid off much sooner. Due to the fact that interest rates are based on the principal amount, paying the principal amount earlier will result in a marginal reduction in the amount of absolute interest that must be paid.
Pay Extra EMIs
Although it may appear challenging, if you truly want your debt to be paid off sooner than expected, try paying extra EMIs. Paying your EMIs with extra money will help you reduce your principal and, as a result, your interest.
Pay Off Extra Annually
Increase the amount you pay in EMIs for your home loan once you are appraised annually by your company. This will lower your loan's principle and, of course, the interest.
Get Your Home Loan Refinanced
Keep an eye on the current interest rates in the market. You might be able to find loans with lower interest rates than those given by your present lender. This is when you can move your house loan to a different bank. However, before transferring to a new lender, make sure you understand all of the terms and circumstances. Make sure that the savings from a reduced interest rate are not less than the expense of switching to a lower-interest-rate housing loan provider.
Shift to a Lending Rate Based on Marginal Cost of Funds
Since May 2016, all banks have switched from base rate to MCLR, or marginal cost of funds based lending rate. This measure was made in order to assist borrowers in taking advantage of any changes in home loan interest rates.
Please make sure you apply for a loan that meets your monthly budget when applying for any loan with low interest rates.
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