How to Lower the Cost of Your Home Loan

Dev Singhraha

Relocation Expert

Needless to say, that home is a long term commitment and it does create a lot of burden on the borrower’s shoulder if he or she does not get prepared beforehand. To have a stress free home tenure the borrower needs to plan everything very carefully as a huge amount and a long tenure of your life is involved with the home loan itself. That is why the borrower needs to be well aware of all the required information related to the home loan that can help the borrower even a little bit of saving.

Here are some interest facts to help you with lowering the home loan cost.

Opt for shorter tenure

It is always better to opt for shorter home loan tenure like 15 or 20 years. Although the equated monthly instalment (EMI) will be higher but the interest to be paid will be less. As the principal amount gets paid faster due to shorter tenure thus the interest rate paid is also low due to a less outstanding principal amount.

Repayment of principal amount

The borrower should try to repay the home loan systematically while repaying the principal amount faster to avoid paying higher interest rates. In order to reduce the principal amount, you can also pay extra in cash. This will reduce the interest on the remaining principal amount.

Paying more than one EMI

The borrower can pay more than once in a month with a view to reducing the home loan tenure and interest cost. But remember to plan your finances in such case as paying more than one EMI depends on your flow of income and overall expenses. Although it creates a lot of burdens but for a long run, it’s a beneficial route to follow.

Higher EMI amount

Depending on the increase in your regular income you can pay a higher EMI amount and reduce the burden of your home loan. And accordingly, you can calculate your tenure, home loan amount and interest rate.

Balance transfer

You can opt for balance transfer from any other bank offering a lower rate of interest. Banks usually do not reduce the rate of interest on the home loan until and unless you ask them to do so. If you existing bank from where you have taken the home loan does not reduce the interest rate then you can get the balance of the home loan transferred from any other bank which is offering a comparatively lower rate of interest.

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