A Complete Guide How to Reduce Your Home Loan EMI Payments

Are you an existing home loan borrower who pays a large amount in EMIs and is unable to make savings? 

Even if you are a new borrower and to lower down home loan EMIs, you don’t need to worry. 

It is because if you can follow a few tips, you can reduce home loan EMI and save a lot. How? Read on and explore more!

Negotiate for a better deal 

As per your existing relationship with your bank or a lender, along with a repayment record, you can request a reduced home loan interest rate. In turn, you can pay the lower home loan EMIs. Once you negotiate your loan terms and conditions, you would be able to pay reduced EMIs. 

Go for a home loan balance transfer

If your existing lender does not oblige by offering a lower home loan interest rate, you have another option. You can opt for a home loan balance transfer. This facility can help you transfer your home loan account to a lender offering a lower rate. Once your home loan interest rates are reduced, you would be able to pay the lower home loan EMIs. But, when you go for a home loan balance transfer, you have to pay processing and other charges. They are to your current and new lender. Once you go for a home loan transfer, you may also enjoy a high-value top-up loan. The top-up loan comes with a longer amount and a rate as your ongoing housing loan account. One of the best benefits of the top-up loan is that you can use it for any need. If the home loan balance transfer charges are more than what you will save, you should not go for it. To estimate your costs, you can use the home loan balance transfer calculator available on a lender’s website for free. This way, you can be confident if the switch is worth going for.  

Make part prepayments during the tenor

One of the best ways to bring down your home loan EMIs is to make prepayments from time to time during the tenor. When you make a prepayment, a part of your principal could be paid early. In turn, it may lower down the outstanding amount, and the housing loan EMI could be reduced. Nonetheless, when you make prepayments during the loan tenor, some lenders may levy some charges. Thus, when you do that, always have an idea about the charges against it. This way, you may not feel cheated when your lender asks you to pay extra money. 

If you are a new borrower, you can always bring down your home loan EMI amount. It is possible after following a few handy tips. Let’s take a look: 

1. Make a sizeable down payment

    

When you avail a home loan, you have to bear 75-80% of the cost of your new home on your own. It is called the down payment. The higher is your down payment amount; the lower will be your loan EMI amount. It is because you will only have a small borrowed amount to manage. Thus, if possible, pay a considerable down payment amount, and enjoy lower home loan EMIs. 

2. Go for a longer tenor

You can enjoy managing your outlays better after going for a longer tenor. It can help you spread your loan amount and manage smaller EMI amounts. The only demerit of a longer tenor is that you will have to deal with higher home loan interest rate charges. If it is possible to do that, you should try going for a longer tenor. 

3. Shop around

While applying for a home loan, don’t settle for the first offer. Instead, you should shop around and compare all available deals. This way, you would be able to see if an offer matches your repayment budget and choose it. The facility is available on a lender’s website for free and is accessible 24×7. 

If you can follow the discussed tips for existing and new borrowers, you can enjoy paying lower home loan EMIs. Based on your needs, you should follow one of the tips and get going.