The feeling of being a homeowner is amazing but the interest rate at which the home loan amount has to be paid off will amaze you for sure. So, inspite of depositing a huge sum of amount in calculation to the higher interest rate, consider the below-mentioned points as they are helpful to secure low-interest rate. The revision of CRR, Repo Rate and others impact the rate of interest hence consider these points to pay less:
1. Consider Home Loan for Short Duration
Many home loans are available in the market and the loan borrowers usually look for a long-term financial support that as it allows them to pay low-rate EMIs. But, this is not a wise thing to do as the heftier EMI you pay every month, set the rate of interest on to the principal amount. So, always opt for a home loan with small duration as it will help you save the extra money which has to be paid off as the interest on the principal home loan amount.
2. Deposit Double EMIs at Regular Intervals
Cut down on the expenses and save money to pay Two EMIs in the span of a couple of months. We suggest you deposit two Equated Monthly Installments at a regular interval as it directly diminishes the principal loan amount. The diminishing principal amount means a lower rate of interest and this means you have to pay less. So, avail benefit by putting in extra efforts to save for a smart tomorrow.
3. Credit Lumpsum Money
In case you are about to receive Lumpsum money like arrears or bonus then act smart and credit this entire amount into the home loan account as it will cut down the outstanding loan amount by a huge margin. This submission of money will reflect onto low-interest rate and then you can get rid of the loan by saving a huge sum of money.
4. Transfer Home Loan Lender
Keep a tab on the interest rate on home loans and apply for transfer of lender. Compare and study the policy of all before opting for transfer as the least rate of interest will make you save huge while paying the minimum amount. Also, maintain a regular EMI payment before applying to switch lender as irregular EMI payment is likely to reject your application for lender transfer.
5. Opt for Marginal Cost of Funds Based Lending Rate
The Marginal Cost of Funds Based Lending Rate [MCLR] is a step taken by the banks to cater the loan borrowers. This was initiated since May 2016 for calculating the rate of interest. Although, it is always better to keep a margin for paying home loan.