How to reduce your home loan EMIs for comfortable repayment
New Delhi : A home loan is a long-term commitment that often lasts decades. Given how excited most of us are to buy that first house or the right investment property, it’s not uncommon for us to spend a little extra. Typically, we try and leverage the best deal given our home loan eligibility to buy the best property in the range. The task is made yet easier with the home loan EMI calculator available online today, with which you can accurately check your EMI in a matter of seconds.
The problem is, in the long run, the sizable EMIs that once seemed doable start taking a toll every month. This is one of the main reasons experts suggest going for a property well within your budget; an expensive home can stretch your finances too thin and drain your resources.
But even with effective planning, repayment can often become a burden you’re unable to bear. For example, the current economic scenario has made it difficult for many to repay their home loan EMIs with the same level of comfort as they did in the past. In such situations, it is important to know how to reduce your EMI as doing nothing increases the risk of default. Let’s look at four reliable ways to reduce your home loan EMIs and work out a comfortable repayment alternative.
Negotiate for a lower home loan interest rate
There may be instances where you’re repaying your home loan at a higher interest rate than the one currently on offer. If you’ve opted for a floating rate home loan, you have the option of negotiating with your lender for a lower home loan interest rate. With a good repayment track record, the lender may approve your request upon paying a nominal switch fee as applicable.
Make loan prepayments
One of the best ways to reduce your EMIs is to use any excess funds available toward loan prepayment. All lenders allow loan prepayment and by doing so, you reduce the total principal amount payable. As a result, your total outgo is reduced and thereby your EMI amount. Ideally, you should try to make a partial-prepayment at least once or twice a year.
Opt for a home loan balance transfer
The last resort to lowering your EMIs on an existing home loan is to opt for a home loan balance transfer. With this feature, your current outstanding amount is transferred to a new lender and you can access more favourable terms. At this stage, you can either negotiate for a lower home loan interest rate or a longer tenor.
For the lowest EMIs, you want to opt for the best possible interest rate over the longest tenor option available. However, use the home loan EMI calculator to calculate your total interest outgo to decide if the change is worth it. A balance transfer is a viable solution because it is easily accessible. Since you’re already a borrower, you don’t have to worry about meeting new home loan eligibility terms. All you have to do is apply with the new lender and initiate the loan foreclosure procedure with your existing lender.
When availing of a loan, it is important to try to make the entire undertaking as comfortable as possible. Whether it is negotiating for a better home loan interest rate or shifting to a new lender, exhaust all available options as defaulting is something you want to avoid at all costs. Ideally, opting for the right lender from the beginning is your best bet because this means you’ve gotten the best loan terms for your profile. However, if that isn’t the case, you can always opt for a balance transfer and switch to a better financing option from another lender, such as the Bajaj Housing Finance Limited Home Loan.
The home loan offered by Bajaj Housing Finance allows you to easily transfer your loan from your existing lender and gives you access to more favourable terms. While opting to transfer your home loan, you can also avail a top-up loan subject to eligibility being met and enjoy all other loan features on offer. These include a flexible tenor, expert counsel services, minimal documentation and swift loan processing. The offering also comes with several home loan calculators, enabling you to calculate your potential savings. To take advantage of these benefits, simply apply online for a hassle-free experience.
