Business

How Housing Loan Borrowers Can Get the Lowest EMI

A home is perhaps the most significant financial commitment that most people will make in their lifetimes, especially in comparison to other important life goals such as purchasing a vehicle or amassing funds for your child’s higher education. Because of the involvement of greater loan amounts and longer loan tenures, home loan EMIs frequently take up a larger portion of most people’s financial lives and active work life years. However, there are several options for lowering your house loan EMI load, including taking advantage of low and advantageous home loan interest rates. To know your EMI amount, you can take the help of the ICICI Home Loan Emi Calculator.

And here are some clever strategies that may be used by both current and prospective house loan borrowers to reduce their monthly EMI payments:

-Before taking out a home loan

Choose a longer repayment period for a home loan

Choosing a longer house loan tenure will result in a reduced EMI amount, which will allow you to repay the loan comfortably without placing an undue strain on your financial situation. A home loan of Rs 50 lakh at an interest rate of 8.5 percent per annum with a term of ten years would result in an EMI of Rs 61.993 each month. A longer repayment period of 25 years, on the other hand, brings the monthly instalment down to Rs 40,261. If confused, you can take the help of Axis Bank Home Loan EMI Calculator to understand the changes in EMI.

So it would be smart to make use of an online EMI calculator tool in order to determine a loan tenure for which you would be comfortable making monthly payments with a corresponding EMI calculator tool like ICICI Home Loan Emi Calculator.

You should keep in mind that while a longer loan period raises the overall interest cost of the loan, you can reduce this cost by making prepayments whenever you have the extra money in the future. However, the Reserve Bank of India has mandated that lenders not levy prepayment fees in the event of floating-rate loans; fixed-rate loans may still be subject to such fees. Prepayment charges should be avoided whenever possible because the total benefits of prepayment (in the form of interest expense savings) outweigh any prepayment charges that may apply.

Make a larger down payment if possible.

Given that the Reserve Bank of India enables lenders to finance up to 75 percent to 90 percent of the cost of a house through a home loan, borrowers are required to put up a minimum of 10 to 25 percent of the purchase price as a down payment. But you should check your EMI on Axis Bank Home Loan EMI Calculator and try to make a larger downpayment instead of merely meeting the bare minimum criteria. It is advisable to do so since the greater the amount of money you provide from your own pocket in the form of a downpayment, the less money you will have to borrow and repay with the principal as well as interest.

Furthermore, making a larger downpayment would result in a lower LTV ratio requirement, which would increase your chances of being approved for a home loan in the future. While attempting to acquire a higher down payment for a home loan, it is critical to ensure that you do not overextend your financial resources or jeopardise your ability to fulfil other crucial financial objectives.

Make a comparison amongst numerous prospective lenders.

The comparison of numerous lenders before settling on a particular lender is another sensible move that prospective home loan applicants can perform in order to minimise their predicted home loan EMIs which can be checked as per loan amount, tenure and interest rate entered in the Axis Bank Home Loan EMI Calculator

When comparing loans, consider variables such as the interest rate, the loan term, the processing fee, the loan amount, and prepayment penalties, among others. Instead of visiting multiple lenders’ websites or branches to enquire, consider visiting online financial comparison portals to enable comparisons and the selection of the most appropriate lender for your situation. Customers’ financial requirements and eligibility criteria, such as their credit score and monthly income, are taken into consideration by such platforms, allowing them to compare prospective lenders offering house loans on the basis of such requirements and criteria.

Maintaining a strong credit score is essential for obtaining affordable interest rates.

When it comes to reviewing your home loan application, your credit score is one of the most important factors to consider. A good credit score, which is typically considered to be 750 or higher, can increase your loan eligibility and possibly help you get reduced interest rates on your loans and credit cards. In order to avoid disappointment while applying for home loans, it is usually advisable to check one’s credit score. This habit also permits folks with lower or no credit scores to take the necessary remedial measures to develop or improve their credit scores and then apply with a better and higher credit score later on down the road.

Another important step is to create the practice of periodically examining one’s credit report, which should be done at least once a month. This practice would give you enough time to make any necessary corrections to your credit report in order to raise your credit score and have any errors or discrepancies (if any) corrected as soon as possible by the credit bureau.

Existing borrowers

Take the decision to transfer your home loan balance and have your loan term lengthened.

With an extended loan tenure leading to a cheaper monthly instalment payment, many borrowers who seek to lessen their EMI load opt for the option of asking for an extension of the loan tenure from their lending institution. You can visibly see the difference in EMI upon changing tenure when checking the EMI amount on ICICI Home Loan Emi Calculator

Also, requesting that your lender extends your loan tenure, on the other hand, is seen as loan restructuring, which may fall under the ambit of a rewriting regulation and, as a result, may have a negative influence on your credit score. If you want to avoid this, try transferring your debt to a new house loan at a low-interest rate and then refinancing for a longer term rather than continuing with the current home loan’s remaining term.

However, keep in mind that a longer loan term will result in a larger overall interest cost which you can even check on ICICI Home Loan EMI Calculator, so attempt to make prepayments whenever you have the extra money in the future to save money on interest. When considering a balance transfer, keep in mind that the new lender will treat your request as if it were a new home loan application and will consequently impose expenses such as processing fees, administrative fees, and other charges. Proceed with the balance transfer only if the overall savings are significant and outweigh any fees or charges that may be incurred.

Summing it up

There’s no denying that getting a home loan after checking the affordable EMI amount on Axis Bank Home Loan EMI Calculator is one of the most important and high-stakes financial decisions a person will make in his or her life. Furthermore, because of the longer loan repayment term associated with home loans, the overall interest expense is on the higher side. As a result, it is critical for both new and existing borrowers to take the necessary steps to reduce their EMI load in every way feasible while maintaining their financial well-being.

Related Articles

Back to top button