5 Tips To Pay Less On Your Home Loan Interest Rates.

Home loan interest rates are a huge area of concern for the borrowers when it comes to avail of housing finance. It’s the crux of any form of a loan and if not figured properly you can get into deep financial trouble. An affordable interest rate can help you reduce the monthly EMIs and you can comfortably make payments towards it. There are leading aggregator sites online that will help to compare apple-to-apple online and make a wise decision about choosing a particular firm and interest rate for a housing loan.

So, here are a few tips that will help you to reduce the burden of your housing loan interest:

Firstly you should start saving for a higher down payment

Any lender sanctions up to 80-85% of the home loan amount and the rest 15-20% are paid by the borrower itself. Therefore, experts say you should start saving for the margin money for a year or two and accumulate a larger down payment. It will help you borrow a small amount and thus, the interest calculated would also be less. Larger down payment will mean you pay less interest on the entire tenure of your housing loan.

Start building a good credit score for better home loan interest rates

Besides getting speedy approvals, a good credit score can help you negotiate with the lenders for low-interest rate deal. It displays your willing to repay your debt on time and makes you a responsible citizen as well. Thus, lenders are willing to entertain such candidates, consider their application and do quick loan sanctioning. While you’re saving up funds for a larger down payment you can work on your credit score as well by repaying any form of pending debt such as car loan, personal loan, credit card bills, etc. Make sure you make the EMI repayment on time. The oldest credit card will reflect your repayment history and your credibility time period offered by the bank. It should positively impact on your credit score and leverage your negotiating powers. Even 0.5-1% decrease in the home loan interest rate will help you save loads of money over time.

Go for floating home loan interest rates

Many people want to protect themselves against the market tides and thus opt for a fixed interest rate. But remember fixed rates are on the higher side and yield more money. If you’re in your late 20s or early 30s you can take a little bit of risk and can opt for a floating rate on your home loan. You can definitely save money and on an average, it would be a balanced interest rate in the long run. Floating rates are normally lower compared to fixed interest rates and you can save a considerable amount of money. You can talk to the experts who can anticipate well on the real estate and loaning sector and accordingly give a wise suggestion on the interest rate deal. If the interest rates start to increase too frequently and consistently you can shield yourself with fixed interest rates for a minimal fee.

Keep making prepayment at regular intervals

It’s one of the golden tips to reduce the overall burden on your home loan interest rate. Making prepayment will decrease the principal amount and automatically bring down the interest rate incurred on it. So, if you have got any increment, bonus, investment maturity returns you can always divert it for making prepayments and enjoy a lower monthly installment of your home loans.

Always compare and opt for a balance transfer

If you see that your existing lender is not giving you much benefit on the interest rates, you can compare the home loans in the next 2-3 years’ time and plan for a home loan refinance. If you struck with a good deal talk to your existing lender. If they’re not willing to offer it, in spite of your good repayment history and credibility you can always migrate to another lender. You should go for such option as long as the switching fee and other charges implied are lower than your potential savings on your new interest rate deal.

Hope these tips will help you save significantly on your home loan interest rates. Don’t forget to take an opinion from your financial expert. Apply for housing loan online today!

Tips to reduce your home loan interest rate in India.

It is a dream of every working-class member of the Indian society to purchase a home. For this very purpose, he or she saves money in the form of fixed deposits, funds, etc. throughout their lifetime. However, in recent years, the costs of properties and plots have surged greatly; thus, a lot of people find it difficult to fulfil their dreams of purchasing a house of their own.

In here, financial institutions play a huge role by offering home loans in India at attractive interest rates. Further, the new-age banks and NBFCs (non-banking financial companies) even provide an additional discount of 0.05% on the interest rates for women borrowers and co-applicants. Thus, today in this article, we will be sharing a few tips that will greatly assist you in reducing your home loan interest rate:

  • Look out for good deals: The new-age financial institutions have now started offering home loans online. Thus, you get the option to compare and look out for the loan products from the comfort of your home or office. The reason being, the interest rates charged by the new-age financial institutions vary from one lender to another; thus, comparing amongst them will help you choose the one that suits your needs the best. You can easily choose to compare amongst loan products on the aggregator’s websites.
  • Loan tenure: The banks and NBFCs (non-banking financial companies) offer you flexible repayment options in the form of EMIs (equated monthly installments). This not only helps you to repay your current debts but also plan out for the future ones. Further, your EMIs are calculated on the basis of the principal amount, home loan interest rate, and repayment tenure. However, if you opt for a longer repayment tenure, then you would have to repay higher interest rates; thus, if you want to reduce your rates of interest- then choosing a shorter tenure would be a wiser option!
  • Improve your credit history: The new-age financial institutions offering home loans in India scrutinize your credit score and history. The reason being, your credit history gives them an insight into your financial management skills and helps them you gauge your repayment capability. Therefore, ensure that you work and improve your credit score before applying for a housing loan; as this will greatly help you to negotiate and reduce your interest rates. The best way to improve your credit score and history is to repay all your previous and current debt on time.
  • Transfer of balance: In the recent years, the banks and NBFCs (non-banking financial institutions) have taken a number of steps to help the borrowers, and the option of a balance transfer is one of them. Transfer of balance, as the name suggests, means that you will be transferring your outstanding loan account from one lender to another. This feature allows you to renegotiate on the rate of interest with the new lender- to obtain a lower home loan interest rate.

Hope this article will help you to obtain a lower interest rate home loan.

Good luck and all the best!

5 Don’ts when applying for home loans in India.

Your home is one of the big-ticket purchases, and it’s one of the greatest investments you could make in your life. Due to the rising real estate prices, you would apply for a home loan with any of the lenders across India. But mere applying is not enough, because there is more towards it. A few things which even lenders won’t be able to tell you. It’s all about analyzing things on your own. So, here are a few things that will prevent you from falling into the trap of huge debt, and avail attractive home loan interest rates:

Choose your property and the lender

It’s a common practice in India to first ascertain the loan amount. But technically speaking, if you first choose your lender and if they are not ready to offer the loan amount for the property then deciding it won’t make a sense. There are a lot of aggregate sites that will tell your eligibility, home loan interest rates, etc. You can take an overall gist about particular lender willing to finance up to a certain amount. You should then finalize your property, ensure it has thorough paperwork, and then approaches the lenders who have finances houses in the same locality or project.

Splurge your savings

Some people feel having a stable job is good enough to qualify for a home loan. However, lenders expect more from you. They want to see a specific amount in term of savings so that you pay uninterrupted monthly EMIs even if there is recession, job or income loss. Your savings amount will lend additional financial security to your application, and place more trust on your behalf amongst lenders regarding your repayment capability. Any bonus, increment, perks should be saved to make easy loan repayments.

Home Loan

Home loan interest rate

There are particularly two types of interest rates – fixed and floating interest rates. While fixed rates would stay constant through your loan tenure, the floating rates would change as per the market conditions. While fixed-rate seems to the obvious choice for salaried individuals, experts say a person with high-risk potential can opt for floating interest rates. Home loans in India are taken for a longer tenure, and the market conditions are bound to change over the course of time.

Don’t’ start a new credit line

Your lender will check the fixed monthly obligation and see how reliable you are in repaying the share of your home loan. So, if you already have a huge debt, your chances of getting home loan approval seem to diminish. Before planning to take home loans in India close all your existing credit lines and don’t go for any new one. Closing credit lines will automatically shoot your credit score, and you will get instant loan approval.

Don’t make investments

Although, investment returns are very good tactics to pay a lump sum and reduced the overall loan burden; however, over the course of time if it doesn’t yield many returns it will affect your repayment ability. An investment that gives steady returns such SIP, mutual funds would definitely make senses, but don’t go for highly volatile investments such as equity stocks or forex investments.

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