Have you already availed the home loan facility and have purchased your dream home? If yes, then the home loan EMI may have become one of the monthly burdens.
Generally, it may be consuming about 30-40% of your income. After the payment of the home loan EMIs, you may be left with nothing to save for the future. It is even after you may have used the home loan EMI calculator in advance to know the exact EMI.
Since the home loan comes with a longer tenure, it is bound to hamper your outlays for long.
But you don’t need to be stressed as you can reduce the home loan EMIs easily.
Read on and explore now!
Here’s how you can lower your home loan EMI
- Going for a longer tenure
To pay the lower home loan EMIs, and reducing the burden, you should opt for the longest possible tenure. Most lenders give the tenure of 20 years. By doing that, you will be able to stretch your loan money and pay reduced EMIs. But the only thing is that you will need to pay more as interest charges while choosing the longer tenure.
- Pay extra amount at least once in a year
All banks and non-banking finance companies (NBFCs) let you make partial prepayments over the home loan tenure. It is possible to make at least 2-3 prepayments in a year. And the number may vary from banks to banks. Hence, it should be your prime duty to make at least 1-2 partial prepayments in a fiscal year. That will help you reach the principal amount in a flash and reduce your burden.
- Increase the EMI amount per year
In case if you have availed the home loan on the floating interest rate, then multiple lenders may let you increase the EMIs. You can consider doing with the growth in your income over the years. Even if you increase the EMI amount by 5-10%, then you will manage to clear off the loan faster compared to normal EMI payments.
- Pay increased EMI amount along with prepayments
If you combine both the options of paying extra amount in the form of prepayments and increasing the EMI figure by 5-8%, then you will pay off the loan much faster. You can use the home loan prepayment calculator and know the cost of doing that.
- Renegotiate the home loan interest rates
If you have managed to repay the EMIs for the ongoing housing loan and if your cibil score is higher, then you can make the most of it. You can reap the benefits by renegotiating the housing loan interest with your lender. Your lender may oblige by letting you enjoy a lower rate of interest and pay reduced EMIs.
- Go for the home loan balance transfer
If none of the tips works for you, then you can go ahead and opt for the home loan balance transfer facility. Under this, you can switch your existing home loan from your current lender to the one offering a lower rate of interest. This way, you can start paying lower EMIs and save big for other things in life. Your existing lender may charge an amount for making the switch. You can use the home loan balance transfer calculator to determine the exact cost for availing the facility. When you go for the home loan balance transfer, you may also avail the top up loan. It gives a higher amount to fund anything extra as per your needs. The rate of interest of the top up loan and the tenure may be almost the same as that of the home loan. It means that you can repay the top up loan without worries.
By following the discussed tips, you can help yourself reduce the home loan EMI and handle your outlays efficiently.