Home loans are usually of a high amount and involve a longer repayment tenor. So, reducing your home loan’s interest payment is something that you should consider seriously. Taking certain measures will help you action this. Even if you are able to lower your interest payment marginally on a monthly basis, on the whole, your savings are sure to be sizeable. Take a look at a few smart ways in which you can reduce the interest on your home loan to make repayment convenient and affordable.
It is possible that you may have taken a home loan on a fixed interest rate to get immediate finance to buy a home in the past. But, if you come across a good home loan offer from another lender, it is worth considering a home loan balance transfer. This way, you will be able to benefit from a lower rate of interest.
However, it is best to do this in the early years of loan repayment. This is because during the initial years of the tenor, the interest component of your EMI is higher than the principal component. So, carrying out a transfer at this point is most beneficial. You can consider transferring your Home Loan to Bajaj Finserv to make the most of the low housing loan interest rate. You can use the home loan balance transfer calculator to view your total savings.
Home loan interest rates vary across lenders so choosing a lender wisely is important. But, also pay attention to whether you are opting for a floating or fixed interest rate . A home loan that comes with a floating interest rate offers you more affordability. As and when the lending rates drop, you can enjoy this benefit on your loan’s interest rate.
Your salary is bound to increase with time. So, when you receive a substantial raise with regards to your monthly income, you can increase the amount that you pay as EMI. When you do this, you will be able to repay your loan quicker, over a shorter tenor. As a result, your total interest payment burden will reduce and you will be able to enhance your savings.
Another way to reduce your overall interest payment is to make regular part prepayments towards the loan’s principal. When the principal drops, the interest amount will reduce too. To be able to make the most of this benefit, ensure that you choose a lender who allows you to make multiple part prepayments at no extra charge, such as Bajaj Finserv. Also, you can make use of its Home Loan part prepayment calculator to calculate how much you will save.
Implement these measures to reduce your home loan interest significantly. In addition to this, don’t forget to make the most of the tax benefits that are available to you under various sections of the Income Tax Act. This will further maximise your savings.
Additional Read: Tips to Reduce Your Home Loan Interest
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