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7 mistakes that throw your investments off track

  • Highlights

  • Sound financial health with proper fund management

  • Disadvantages of floating interest rates

  • Gaining optimal returns with properly planned investments

If you are planning to apply for a home loan, don’t let the Home Loan EMIs bite into your monthly savings. Research and negotiatea great home loan deal. Here are a few tips that will help you reduce your home loan interest rates:


The higher your CIBIL score, the lower your home loan interest rate, all other things being equal. The best Home Loan interest rates are available to borrowers who have credit scores of 750 or above (out of 900). As your score goes lower, your home loan interest rate goes up. If you want to

improve your chances of getting a better Home Loan interest rate, you will have to monitor your CIBIL score and make improvements where necessary. Improve your CIBIL score by:
Clearing existing debts
Paying credit card balances
Rectifying errors on credit report
As your CIBIL score increases, your chances of getting better home loan interest rates increase.

Higher Down Payment

Make a large down payment so that you can go for a lower principal amount when applying for a home loan. Lenders calculate your home loan interest based on the principal amount. Therefore, the smaller your principal amount, the lower the home loan interest rate and lesser the Home Loan EMI. As a general rule, you will need to pay a minimum of 20% of the purchase price of your home as down payment in order to get better Home Loan interest rates.

Opt for a Longer Tenor

Since your principal amount and home loan interest rate is divided over a greater number of months, you will end up with a smaller EMI outflow. However, at the same time, you will be required to pay the home loan EMI and interest for a longer period. Thus, you could be paying more interest over the entire duration of the home loan.

3 Simple Steps for Effective Home Loan

Negotiate with the lender

There are times when you can ask a lender for a lower home loan interest rate. You can do it if you are an old customer and have been in good standing with the lender. If you have been making your loan repayments with the lender on time, your lender might consider offering you a better interest rate.

Ensure employment stability

Home Loan lenders prefer borrowers who have been in steady employment for at least two consecutive years. If you have been unemployed for long or switch jobs often, it would not work well for your home loan interest rate. A pattern of declining income will also not fetch you a lower interest rate.

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