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Do you Want to Reduce the EMI of your Home Loan? 

by Yuri Boyka

Do you Want to Reduce the EMI of your Home Loan? 

As per the IBEF website, the Indian real estate market is anticipated to reach Rs.65,000 crore by 2040 and forecasted to contribute 13% to the country’s GDP by 2025. Along with that, the price of real estate is also expected to grow exponentially. While a home loan is readily available, affordability is still arguable, primarily due to costly EMIs. Besides new borrowers, the existing ones often struggle to repay their loan on time. 

In such a scenario, they can consider opting for a home loan balance transfer facility that would help them to reduce the burden of EMIs to a great extent. Besides this, they can also follow some other ways to do the same. 

Tips to reduce home loan EMIs

  • For new borrowers

Following are some tips that prospective borrowers can follow to lower the EMI burden of their home loan.  

  • New borrowers can also choose a longer tenure while selecting a home loan. However, in that case, the overall cost of borrowing increases. 
  • Another effective way to reduce the EMI payable is going for a bigger downpayment. Lenders generally sanction 80% of a property’s value, and the rest of the amount borrowers need to make a downpayment. If they can make a substantial downpayment, the loan amount will be lower and eventually reduce monthly instalments. 
  • They can compare several lenders online to get the best home loan rates. In that case, they also need to understand how to decrease home loan interest, first. For instance, it fares differently for salaried and self-employed individuals. For more convenience, they can also check home loan eligibility for guaranteed approval. 
  • For existing borrowers 

If you are an existing home loan borrower, you can follow the below-mentioned tips to lower their EMI payable. 

  • Individuals can make prepayment as and when they have surplus at hand. In this regard, they can make use of the festival bonus, maturity from earlier investments and any other occasional funds. Lenders allow making the prepayment of the outstanding home loan partially or fully. 
  • In case individuals do not have enough funds to make prepayments, they can also opt for a loan balance transfer facility. It allows them to transfer their outstanding home loan balance to another lender for better housing loan interest rate and additional feasible terms of service. 

However, before opting for this facility, you need to consider a few things that will help you get the best of this transfer

Things to consider while opting for a home loan refinancing 

Following are some essential things to keep track of when you do a home loan balance transfer. 

  • Financial experts advise opting for a loan balance transfer in the initial phase of loan repayment when the interest component is higher. They also suggest avoiding this option after 6 to 7 years of repayment. 
  • You also need to consider the charges like processing fees, foreclosure fees, etc. before opting for this facility. Thus, you have to calculate whether the transfer is worth it or not. For more clarity, you can also use a home loan balance transfer calculator that shows how much you will save by opting for this facility. 
  • Any lender offers you this facility, only if you have a fair and consistent repayment history. 
  • You also need to check if the new lender offers substantial top-up loan amount while approving this transfer. 

Selected housing finance company offers a home loan of up to Rs.3.5 crore with flexible tenure of up to 240 months that facilitate smooth repayment. They also allow existing borrowers to opt for an outstanding balance transfer with minimal documentation. 

Some lenders extend pre-approved offers that simplify loan processing and save time. Besides home loans, such offers are also available for other secured credit like loans against property. You can check your pre-approved offer by submitting some essential credentials like your name and contact number. 

Thus, if you pay higher interest for your existing loan, you can consider availing a home loan balance transfer and lower your EMI components significantly. However, remember to check the charges that you are liable to pay both the lenders while choosing this facility. 

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1 comment

wilson@emily1 September 13, 2021 - 4:36 pm

Nice Blog

I think many times about this but couldn’t find the way.
You just cleared my way to plan this thing.

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