How to Reduce Your Home Loan EMI Amounts?

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How to Reduce Your Home Loan EMI Amounts

A home loan is a serious financial commitment that you will need to honor with a good amount of money every month. Such sums can significantly disturb your finances if you do not give a lot of thought while selecting your repayment terms. To avoid such a scenario, you can take a few measures before applying for your home loan or while repaying it. This article will take you through the five ways in which you can reduce your monthly EMI outflow while either applying for a loan or repaying it. Read on to know more.

5 Ways of Reducing Your Home Loan EMI Amount

  • Opt for a Longer Repayment Tenor – When you extend your home loan repayment tenor, your monthly EMI outflow will reduce considerably. Although it will reduce your overall monthly EMI burden, such an act will lead to an increase in the applicable interest rate. Regardless, it is a good option if you are someone who has financial limitations. In spite of an increase in the interest rate, a longer repayment tenor will help you repay the housing loan comfortably. 
  • Go For a Home Loan Which Attracts a Floating Interest Rate – The floating interest rate system will allow you to take advantage of any interest rate cuts made by the RBI during your repayment tenor. Hence, if your lender permits, you can choose to move to a floating interest rate system. If you do go for a home loan that attracts a floating rate of interest, you will have to keep an eye on any interest rate changes that RBI introduces after that. 
  • Make Prepayments – Another way of lowering your monthly EMI outflow is by making regular partial prepayments. This should ideally be done as and when you realize that you have surplus funds to do so. In addition to helping you reduce your outstanding principal amount, it will also reduce your monthly EMI commitments.
  • Transfer Your Home Loan to a Different Lender – There is a good chance that some other lender is offering home loans at a lower interest rate that is applicable to you. If you do find such a lender, you can get the balance amount of your home loan transferred to them, if they provide such a facility. If you do something like this, chances are that you will reduce your interest burden considerably. However, before you go for a home loan balance transfer facility, make sure that you compare the interest rates. You will also have to take the several charges associated with getting your home loan balance transferred to the other lender to decide if such a measure is worth your while.
  • Use a Home Loan EMI Calculator Tool – If you are at that stage where you are thinking about securing a home loan, you must make use of a home loan EMI calculator tool. Through the tool, you can compare the EMI payments you will have to make if you take home loans from different lenders and at different repayment terms. That way, you will be able to select a home loan that you will find comfortable repaying.

The tips will help you chalk out the best loan plan to avail of the lowest EMI rates. Bajaj MARKETS curates the best home loan offers with lucrative interest rates. Apply to come to a step closer to enjoying the warmth of your own home or real-estate right away.