Simple tips to lower your SBI Home loan EMI

The majority of us have the purchase of a house as one of our primary financial goals. Because the cost of a home typically equals several years’ worth of money, or even decades’ worth of savings, obtaining a home loan continues to be the only choice for getting one step closer to achieving this objective. However, the high cost of a home loan results in high monthly instalment payments (EMIs). These payments take up a considerable portion of the borrower’s regular income, which leaves very little opportunity for the borrower to pursue other financial objectives.

The following are some pointers for current SBI Home Loan borrowers as well as prospective home loan borrowers that can help decrease the burden of their home loan EMIs:

#For current SBI Home Loan borrowers

Consider making a balance transfer on your housing loan and extending the repayment tenure of your loan: When a current borrower wants to lessen the burden of their EMI payments, the first thing that typically comes to mind is to prolong the loan period. This is due to the fact that a longer loan tenure indicates cheaper EMI payments. However, asking your current lender to extend the loan duration is regarded to be loan restructuring, which may fall under the ambit of a rewriting norm and have a negative influence on both your credit score and your eligibility for future loans and credit cards. As a result, rather than choosing to do this, it would be wise to consider transferring the balance of your house loan to a different lender that offers a cheaper interest rate and a longer repayment term in order to bring down the amount that you pay each month toward your home loan.

For illustration, let’s say you had an ICICI Home Loan for Rs 35 lakh at 9.5 percent for 22 years, and your monthly payment was Rs 31,656. At the moment, the amount of your home loan that is still outstanding is close to Rs. 30.31 lakh and you have 15 years left on the loan’s tenure. Now, if you choose to transfer the balance of your home loan to another lender at an annual interest rate of 8.5 percent for the remaining 15 years of the loan’s term, your EMI will be reduced to Rs 29,853. Your monthly instalment will be reduced even further to Rs 24,411 if you choose for a lengthier period of 25 years.

When you are applying for HLBT, you should keep in mind that the new lender will treat your HLBT request as a new application for ICICI Home Loan and will, as a result, levy various expenses such as processing fees, administrative charges, and so on. Because of this, it is absolutely necessary for you to ensure that you take into account all of the charges that are involved with the balance transfer option before making your choice. Proceed only if you will save a significant amount of money on interest payments compared to the expenditures associated with making the balance transfer.

# For First-Time ICICI Home Loan Applicants

-Make an effort to save up for a larger down payment: The RBI permits lenders to finance up to seventy-five to ninety percent of the cost of a property in the form of a home loan. This means that borrowers are required to arrange the remaining cost from their own pockets in the form of a down payment. Although the majority of SBI Home Loan borrowers will usually make an effort to provide the bare minimum required for a down payment, the applicant’s long-term financial fitness would be best served by making a larger commitment to the down payment. Increasing the size of your down payment will result in a smaller total loan amount, which will, in turn, result in cheaper interest costs and EMIs. 

Additionally, this will increase your chances of having your ICICI Home Loan application approved because the lender will be exposed to less risk. Despite this, you should take care not to put a dent in your savings for unexpected expenses or the progress you’ve made toward your most important monetary objectives while you work to build up a larger down payment. It’s possible that doing so will force you to take out loans to fund your aspirations, which would result in increased interest costs.

-Decide on a longer loan term- Deciding on a longer loan term when you make your application for a home loan not only lowers the amount of your monthly EMI payment but also raises the likelihood that you will be approved for the loan. However, because a longer loan term may result in a higher overall interest rate, you may want to consider making prepayments on your mortgage whenever you have extra money available in the future. In the case of loans with a floating interest rate, the RBI has prohibited lenders from imposing a prepayment fee; however, in the case of SBI Home Loan with a fixed interest rate, lenders are free to charge or waive this cost as they see fit. Utilizing an online EMI calculator is a good idea if you want to determine the length of your loan that will allow you to make the fewest payments possible, given your income and other factors.

Also Read: Best Home Loan Interest Rates

-Get loan offers from many different lenders: When looking for an ICICI Home Loan, it is a good idea to do some research on the many home loan lenders that are available to you and then compare these lenders using criteria such as the interest rate, the processing fee, the length of the loan, and so on. The lender’s evaluation of the credit risk associated with your credit profile will determine the interest rate, in addition to any other expenses involved with the loan. This assessment will vary from lender to lender. For instance, many housing lenders provide loans with interest rates that are cheaper for borrowers who have a better credit profile.

Ellen Hollington

Ellen Hollington is a freelance writer who offers to ghostwrite, copywriting, and blogging services. She works closely with B2C and B2B businesses providing digital marketing content that gains social media attention and increases their search engine visibility.