Home loans are loans used to buy the house you want. It assists the buyer with funds to buy the house of their dreams. But it is also the most significant liability for the person in their lifetime. The tenure for the loan is the longest compared to other loans such as education, auto, business, and personal loans. You have to pay the EMI of the loan for the most extended period. However, you can reduce the EMI of an existing home loan in six ways. You can even calculate your EMI on a home loan EMI calculator.
Transfer your loan to another bank or financial institution:
After taking a home loan from a bank or any other financial institution, you might not pay much attention to that bank’s interest rate and EMI. You can shift to any other bank or financial institute in this case. There’s no penalty for moving your loan from one moneylender to another. The moneylender will charge his basic fees, but that’s all. So, if your bank is not competitive with the interest rate and EMIs, you can shift to any other money lender.
The shift from fixed loan to floating loan:
Once you take out a fixed home loan, you must pay a fixed interest rate and EMIs. Usually, the rate of interest and EMI for fixed loans is 1% to 2% higher than the average rate. You are to be charged less EMI and interest rate. So before buying a home loan, choose the floating loan. You must pay a lower interest rate and EMIs in a floating loan. Hence, always select a floating loan over a fixed loan. You may even switch the fixed loan from the floating loan. You can switch to a floating loan from the same or different money lender. Although you may have to pay the penalty, you will still be at a benefit. If you go for a fixed loan, ensure the interest rate and EMIs are lower than the previous interest rate and EMIs.
Partial repayment and EMI adjustment:
If you have a floating loan, you have much flexibility in how you repay your loans. By making partial repayment, you can reduce the tenure of your home loan. You can even bring down the principal amount of your home loan. After paying a substantial amount, you can even ask the bank or financial institute to bring down the EMI.
Extend your tenure of the home loan:
If you suppose you have a lot of financial burdens and cannot pay the home loan, you can ask the money lender to extend your home loan tenure. This will give you time and reduce the financial burden.
RBI offered loan restructuring:
You might find it challenging to repay the amount you borrowed as a home loan from the money lenders. One way of dealing with this is to opt for a moratorium. This way, the EMI will also be waived.
Interest rate regime:
You might be following the old regime of paying the interest. It’s time you shift your authority to EBR-linked loans.
The bottom line:
You might be facing financial burdens after borrowing funds from a money lender as a home loan. But there are ways you can reduce the burden of interest rates and EMI. Check out Finserv MARKETS.
Source: https://economictimes.indiatimes.com/wealth/borrow/6-ways-existing-home-loan-borrowers-can-reduce-emi-amount/articleshow/83422810.cms
