Easy Ways to Lower Your Home Loan EMI Amount

For many people, buying a home involves taking a home loan. While this loan can make owning a home more accessible, the monthly EMI (equated monthly instalment) can be a substantial financial commitment. A high EMI can impact your monthly budget, leaving less room for other expenses or savings. The good news? There are several smart ways to lower your home loan EMI amount, making it easier to manage. Here is how:

1. Choose a longer loan tenure

• Why it helps: When you increase the tenure of your home loan, the EMI amount decreases because the loan repayment period is spread out over a longer time. While the interest paid over time will be higher, this option can reduce your monthly financial burden.
• Things to keep in mind: Longer home loan tenure means you pay more interest in total. If reducing the EMI amount each month is your primary goal, then this is a helpful approach.

2. Go for a lower interest rate

• Why it helps: Interest rates can vary depending on the lender and your credit profile. A lower interest rate translates into lower EMI payments, as you will be paying less interest on the principal amount.
• How to do it: Compare different lenders to find one with a lower rate, or consider switching to a floating rate if interest rates are expected to decrease in the near future. Negotiating with your lender or transferring your home loan to a lender offering a lower rate can also help. Always consider the processing fees involved in transferring a loan before you decide.

3. Make a bigger down payment

• Why it helps: The more you pay upfront as a down payment, the lower the principal amount of your loan will be. A smaller principal amount means smaller EMIs because there is less money for the interest to accrue on.
• Example: If you are considering a home costing Rs. 50 lakh and you make a 20% down payment, your loan principal will be Rs. 40 lakh. If you increase your down payment to 25%, you are reducing the principal amount even further, meaning a lower EMI.

4. Opt for part-payments whenever possible

• Why it helps: Part-payments, or lumpsum payments, reduce the outstanding principal amount of your loan. With a lower principal, your EMI amount will also decrease. You can make part-payments with annual bonuses, tax refunds, or any extra income.
• How to do it: Most banks allow part-payments with little to no additional fees. However, it is good to check your loan agreement as some lenders might charge a fee for part-payments, especially on fixed-rate loans.

5. Consider balance transfer

• Why it helps: Sometimes, another lender may offer lower interest rates or better loan terms than your current lender. By refinancing, you can switch your existing loan to a new lender, which could help you achieve a lower EMI.
• What to watch for: While refinancing is a great option, it is essential to evaluate the costs involved, like processing fees or penalties for switching lenders. Ensure the savings on the EMI amount outweigh these fees.

6. Boost your credit score

• Why it helps: A high credit score makes you eligible for lower interest rates and better terms. If your score is low, lenders may consider you a higher-risk borrower and charge higher interest rates. By improving your credit score, you increase the likelihood of securing a lower interest rate, which translates to lower EMIs.
• How to improve your score: Make timely payments on all your existing loans and credit card bills, avoid taking on too much debt, and keep your credit utilisation low. A good score is typically above 725, which can help you negotiate better terms on your home loan.

Before you take a loan, use a home loan EMI calculator. This tool helps you see how different loan amounts, tenures, and interest rates affect your EMI. It is a great way to plan and make sure you can afford your payments.

Consider Bajaj Housing Finance Home Loan

Buying a home is a significant financial decision, but with the right home loan, it can become easier and more affordable. If you are considering purchasing a home, look no further than Bajaj Housing Finance Home Loan. You can benefit from attractive features such as:

1. High loan amount: Get a home loan of up to Rs. 15 crore* to turn your dream home into reality.

2. Low interest rates: Enjoy interest rates starting from 8.25%* p.a, with EMIs as low as Rs. 741/lakh*.

3. Quick approval: Get approval within 48 Hours* of applying – sometimes even sooner.

4. Long repayment tenure: Repay your loan comfortably with tenure of up to 32 years.

5. No foreclosure fee*: Individual borrowers with a floating rate of interest can prepay or foreclose their loan at no extra charge.

6. Easy application: Benefit from our doorstep document collection service for a hassle-free process.

7. Balance transfer facility: Transfer your existing home loan and get a top-up loan with better terms.

Ready to take the next step toward your dream home? Apply for a Bajaj Housing Finance Home Loan today.