Denice R. Preston
Home loans are a financial tool that has helped millions purchase their dream home. All banks offer loans at affordable interest rates. Home loans have the longest terms and require more financial commitment. Although the interest rate is reasonable, it can be costly to carry it for a prolonged period. It is a good idea to get rid of your home loan. A low-interest home loan can also help you save money on your home loans. This blog will explain how to lower the EMIs of your home loan, both before and after you take it.
How do you lower your home loan interest rate?
Comparative Research
Bank to bank, the interest rate on home loans can vary. Comparative research is essential to find the best home loan interest rates. You can do this online by visiting the portals for different banks and non-bank financial companies. You can also visit DSA’s such as Finance Buddha to find all the offerings of different banks in one place. Do your research before you decide on a home loan.
Adding a co-applicant to your loan application
A co-applicant can be added to your loan application to lower the interest rate if you plan to apply for a mortgage. It will reduce your total cost of borrowing if it is calculated over the entire term. The interest rate can be lowered by adding a co-applicant. This can increase your eligibility for a home loan and help you obtain a loan amount.
Increase Your Credit Score
Your credit score is one factor that could affect the interest rate on your home loan. A lender prefers a loan applicant with good credit. They also get home loan approval at the lowest rates. If you don’t have good credit, your loan application could be rejected. It is important to verify your credit rating before applying for a home loan. If your credit score is low, take the steps necessary to improve it. In case of doubt, write directly to CIBIL.
How do you save interest on your home loan after applying?
Balance Transfer
A home loan balance transfer, also known as home mortgage refinance, is a great way of reducing your home loans interest burden. It can only be used on existing home loans. A balance transfer facility can only be used if you have a home loan outstanding. To be eligible for one, however, you will need to have a good loan repayment record and have been paying the loan for at least two to five years. (This period depends on your lender). This facility allows you to close your home loan with your lender. The remaining loan amount is then transferred to the new lender. Home loan balance transfers are used to lower your home loan’s interest rate or obtain better terms.
Pre-payment and Part-payment are possible
While a pre-payment or part-payment will not lower your home loan’s interest rate, it can help you save significant money on interest. You can prepay your home loan by using any bonuses, savings, or other incentives you may have. This will lower the principal and save you money that you would have spent on interest.
Usually, you have two options when you apply for a pre-payment or part-payment. One is to reduce the term of your loan, and the other is to lower your monthly EMI. You can choose the one that suits your needs and move forward with it.
This article was about getting a low-interest home loan and reducing your home loan interest rate EMI burden if you are already a homeowner.
