How much do you pay each month to service your home loan? Is it still within your budget? If not, it may be time to reduce your monthly installments and save yourself some money. Here are 6 simple ways you can reduce your equivalent monthly installments or EMI on your home loan in India, which will help you save thousands of rupees over the life of your loan!
Repay Loans Faster by Adding Extra Payments
An important step to reducing your home loan is making an extra payment per year. This will not only save you interest, but the faster you pay off your loan, the less the total cost of borrowing money.
Pay Off Other Debts First
Unless you are 100% confident in the stability of your home loan, it is always wise to prioritize your other debts. Generally, debt such as car loans and credit card balances will have a higher interest rate and be easier to repay on a monthly basis than your mortgage.
Ask For An Interest Rebate Or Waiver
Borrowers who are unable to make the full payments on their home loans should contact their lender to request for a monthly interest rebate or waiver. The money you save on interest will help reduce your equivalent monthly installments (EMI) and you will be able to avoid defaulting on your home loan. Contact your lender as soon as possible so that they can take care of this for you before it becomes an issue.
Refinance To Save
The first step to reduce your home loan EMIs is to see if you can get a better rate. You can do this by refinancing your current mortgage and choosing an offer with a lower interest rate. Make sure that the offer includes all of the same terms as your original mortgage including length of time, payment plans, and any prepayment penalties.
Next, you should try getting approved for an above-market interest-rate subsidized loan.
Make Larger Down Payments
There are a number of home loan tips you can try to reduce your EMI. One is to make larger down payments so that your mortgage will be cheaper. This option might not be feasible for people who don't have the money upfront, but there are loans available for first-time buyers with a 20% down payment. This option will also result in lower monthly mortgage bills and it could get you on the path towards building equity in your home sooner.
Choose Longer Terms And Lower Interest Rates
If you are the type of person who does not mind waiting a little longer to start the repayment period, it may be possible to reduce your EMI by choosing a loan that offers a lower interest rate. By opting for a longer term loan, you will end up paying off more in interest over time but, at least initially, your installment cost will be less.
Maintain Your Credit Score To Save
One way to reduce your home loan EMIs is to make your payments on time. You can find a cheap home loan interest rate and get a home loan by securing a low-interest credit card and using it as an EMI advance. Otherwise, use the online service at Emi Calculator India to do your calculations for you.
