We all have a dream to buy our dream home, but to fulfill this dream we need funds. After finalizing the dream home, most of the people look forward to good home loan options. So we should have to do some primary researches before applying for home loans. Finding the right home loan is not an easy task what we think because the interest rate is one of the main concerns while applying for a home loan. So, here we are explaining some reasons to reduce the interest rate on home loans.
Shorten Home Loan Duration
The longer period leads to paying more interest. It is advisable that you need to choose your home loan tenure very carefully. You can calculate all EMI through EMI calculator and take an estimate of installments payment every month. Try to opt for tenure at the maximum payable EMI by you in every month. It will be going to help you save more funds as you’ll pay less interest to the bank.
Revise Your EMI
There may be an option provided on home loans to revise your EMI’s. Once you get a good hike in your business or increment in your salary, you can utilize this option. You may pay 10% more amount on EMI if you get a 20% hike in your income. It will make your burden of home loan lower. Hence you will be able to reduce the interest rate on the home loan.
Refinance Home Loan
You should regularly lookout for the current interest rate on the home loans. You can switch your home loan with another bank at a lower interest rate. But, check all related terms & condition and other charges before switching your home loan. So, it is another way to decrease your interest amount on the home loan.
Pre-closure of loan
If you have good cash inflow and you can easily pay the outstanding amount easily then pay off the balance amount and close the loan. It will help you to save the interest amount. The only pre-closure fee will be charged at the time of closing of Home Loan and interest will be waived off.