A long-term financial commitment like a home loan canbedifficult to manage, especially when interest rates keep fluctuating. A higher interest rate increases the amount of monthly installment, in turn, this disturbs the monthly budget and leads to financial stress. If you are a home loan seeker, you must look for financial institutions that offer loans at a lower interest rate and provides a flexible repayment option. Moreover, in order to safeguard yourself from the fluctuations in the interest rates, you can opt for a fixed rate loan. Though the interest rate on a fixed rate loan is a little higher than a floating rate, it will give you a better idea about your monthly installments. This will enable you to plan your monthly budget in a better way. In addition to that, once you take a home loan, there are a few steps you can take to save on the home loan interest cost.
Ways to save on home loan interest rates
Home Loan Balance Transfer: As a result of the increasing competition in the financial sector, you are subjected to several home loan schemes. Therefore, if you find a financial institution that offers you a home loan at the minimum possible interest rate, you must consider transferring your home loan.
Shorter loan tenure
If you have a good credit score, you must try to repay your home loan at the earliest. With a slight increase in your regular re-payments, you can bring down the tenure of your home loan significantly. A shorter duration loan can help you save on your interest expenses significantly.
Maximize the down payment
To save money in the long run, it is recommended that you pay at least 20% of the market value as down-payment. In addition to reducing the principle amount, making down payment reassures the loan-provider about your financial stability and goodwill.
Increase your EMI frequently
With every increment you get, you can considerincreasing your EMI amount too. Even by increasing the EMI amount up to 5% every year, you can ensure that the loan gets repaid faster. This can substantially reduce the interest cost and help you bring down both the total cost and the loan tenure.
Leading Non-Banking Financial Companies (NBFCs) like Finserv Markets provide home loans at the most competitive interest rates. Flexibility in repayment, minimal documentation along with a hassle-free online application process are the added benefits ofhome loans provided by such NBFCs.
Now that you are wellaware of the importance of lowinterest rates while choosing a home loan, ensure that you make a wise choice. Lastly, before applying for a home loan, do not forget to research the financial institution that you are opting more. Make sure that you read the terms and conditions carefully.
