Homeownership is a lifetime dream for the commoner. The imbalance between your current earnings and inflation always exists. This is the juncture where assistance with home loans becomes a mandate for everyone. When a home loan is your need to make your dream come true, you should check if you are eligible to get a home loan. Take the help of a home calculator. Each time you approach the bank with your home loan application without any groundwork, you end up paying a processing fee, which constitutes a percentage of the home loan. Filter your banks based on your loan eligibility and the interest rate offered because you have to make sure your application is not rejected, as it impacts your credit score and also the chances of getting the loan. The article explores different ways to reduce interest rates on home loan
Check your eligibility
Home loan comparison and eligibility calculator are the best tools to help you know your eligibility for a home loan free of cost. Most of the loan comparison sites make these home loan comparison and eligibility calculators available on the portal to help their customers make an informed decision. So, check your eligibility for free before considering the bank for applying for the loan.
Compare home loan interest rates
The home loan interest rates are the second important factor the customer should consider after checking their eligibility. The comparison sites assist you in the easy comparison of home loan interest rates of different banks. As these rates vary with each lender, contact them or refer to their websites to know the home loan interest rates in India. You can also take advantage of home loan interest comparison sites. Though the home loan interest rates vary as per profile, comparing them before reaching the lender gives a glance at current interest slabs. Choose the lender based on your eligibility and interest feasibility.
Use home loan calculators to check affordability
Apart from letting your eligibility, you should also check your affordability toward the loan. Use home loan calculators to estimate loan amount eligibility. This key information will help you understand your affordability to buy a home with the help of a home loan. Many banks offer home loans for customers depending on their eligibility and interest rates. SBI is one of the most preferred banks chosen by the customers to pick the loan. These calculators help you figure out your estimated EMIs based on tenure and interest rates. Go for shorter tenures if you have big affordability.
Instigate your negotiation skills
There are many banks, from SBI to HDFC, offering home loans in India. When you know that you stand good on credit score and eligible loan limit, you should instigate your negotiation skills to bargain interest rates. The more you stand firm on your negotiation, the better will be the interest rates offered by the banks. You can also approach the lenders with your pre approval loan application showcasing your home loan eligibility with the banks to fetch better interest rates.
Make prepayments
Loan prepayments are the best way to cut down interest on home loans. Make sure to repay the loan in the short term rather than a chosen period. Banks tend to cut off interest on home loans over the principal amount. Making prepayments in the early loan tenure will accumulate toward the principal amount and cut off the interest rates paid toward the loan.
Shorter loan tenure
Suppose you motive towards cutting down the interest rates on home loans. Choose short tenures over longer ones. Shorter tenures will have lower interest rates compared to longer ones. However, make sure you are able to pay big EMIs without fail.
If you motive towards cutting down the interest rates on home loans. Choose short tenures over longer ones. Shorter tenures will have lower interest rates compared to longer ones. However, make sure you are able to pay big EMIs without fail.