6 Tips to Settle for the best Housing Loan Interest Rate Offer
A home loan is a secured debt, and that’s why the housing loan interest rate is affordable.
But if you go for a longer tenor to pay reduced EMIs, you will have to deal with higher home loan interest rate charges. In turn, it will increase the cost of your borrowings.
It is where following a few handy tips to settle for the best housing loan interest rate is vital. This way, you would be able to pocket the lowest home loan interest rate.
Read on and explore more!
1) Put down a considerable amount as the down payment
A down payment is the partial amount of your property for which you are availing of a home loan. Your lender will not sanction the entire cost of the property as a home loan. The maximum amount you will be approved is between 75% and 85-90%. The rest has to be arranged on your own. The higher is the down payment amount; the lower will be your borrowable amount. The less is your borrowable amount; the lower will be the applicable interest rate charges. Once the housing loan interest rate are lower, you will manage to pay affordable EMIs.
2) Settle for a shorter home loan tenor
The tenor of a home loan is up to 20 years or more and varies from lenders to lenders. Many borrowers choose the longest possible tenor to pay the lowest EMIs. It is to ensure that they make timely repayments without defaults. Doing this also keeps the CIBIL score higher. But, what they don’t consider is the higher housing loan interest rate charges. Yes, longer is your tenor; higher will be your total interest charges. Hence, you should go for a smaller tenor. It may increase the loan EMI, but you will end up saving big on housing loan interest rate charges.
3) Compare all available home loan offers online
In the online marketplace, you may come across plenty of lenders offering you different offers making you confused. It is where it becomes a must to compare all these offers online and select one that matches your needs the most. To do that, you can land on a third-party website and compare all home loan deals in one place. The facility is made available for free and works 24×7.
4) Increase your EMI amount
You can also increase your EMI amount if you have been recently appraised and got a hike. Instead of using the increased Salary amount on splurging, you should use it to pay the higher home loan EMIs. This way, your principal amount will drastically decrease, helping you pay lower housing loan interest rate costs.
5) Make prepayments
You can also make prepayments from time to time during the tenor to reduce the borrowed amount and the interest rate. But, you should also check the charges being levied by your lenders.
6) Transfer your current home loan to a new lender
You can also switch your existing home loan to a new lender offering affordable housing loan interest rates. Using the home loan balance transfer facility, you can do that online. It can reduce the loan cost and help you manage lower EMIs. But you should also check the charges of both lenders. If it is more than your savings, you should avoid it.
Be it a new borrower or an existing one; you can settle for the best housing loan interest rates if you consider the discussed points. If you have any doubts, get in touch with a known home loan expert to help you out.