Juggle to pay your home loan? Well, someday all of us dream to have a piece of land that we can call our home. According to a report, 50% of the population in India lives in their own houses and 30% of them live on rented property and 13% live in their parent’s house (Source: TOI). While deciding to buy a home & pay interest on it, certain crucial steps are required to be taken into consideration. 

These 6 tips will help you have a home loan with reduced interest rates and further helps in saving taxes. Let’s read each one of them carefully and take leverage in dealing with your home loan-

• Tenure should not be too long

A tenure of more than 20-25 years is anyways going to keep the EMI’s short but will make you pay more than required on your loan. Keeping it to 10 to 15 years will reduce the total interest on the loan, so you’ll save. 

• Consider prepayments

So, prepayments are another deal that saves you. The banks generally give an option to prepay the loan about and this will reduce the principal amount hence end up with less interest to be paid in the end. But make sure your bank/lender does not charge anything on prepayment, then you may have to deal with double payment. 

• Compare the interests with different lenders

Considering comparing rates from different lenders, a lot of third parties offer to compare the interest rates with different lenders and choose the one that benefits the most. Make sure you go for the best lenders who are worth the values of your home loan & interest amount. 

• Make your down payments a bit more

The down payment amount is the ultimate reflection of your interest payments in the future. Generally, lenders offer to finance 75% to 90% of your property’s value but then you have to pay more as interest, so avoid such decisions and pay initially as much as you can from your pocket.

• Other options should be look-after

Your credit score can be played around. Sometimes, the banks offer preferential offers to clients who have a good credit score history of say 800 or more. So, ask your banker about such deals and take advantage of them in reducing your home loan interest rates.

• Increasing EMI can work

Some banks & lenders offer to revise your EMIs timely., so if you have opted for such a thing then ensure to revise your home loan EMI every once if your salary package has increased or your income has increased in any way. This will substantially decrease the amount of interest to be paid on the loan.

You should definitely consider these points and more to reduce your home loan EMI. Also, read all the documents easily and check their legitimacy with regards to law & offer. Happy Loaning!