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Everyone wants to build their dream house. But, often we have to face money problems. In such a situation we take a home loan. Since the home loan amount is quite large, we have to pay EMIs for a long time.
If you are troubled by the problem of high EMI, then we are telling you the solution to reduce it.
make more down payment
We should save adequate amount of money before buying a house. With this, we will be able to make more down payment and the EMI burden will automatically reduce to some extent. Try to make a down payment of about 25 percent of the total price of the home.
For example, if you are buying a house worth Rs 40 lakh, make a down payment of Rs 10 lakh. With this, you can increase or decrease the loan repayment period and EMI as per your convenience.
Pre-payment is also a good option
Pre-payment is also a good option to reduce EMI. Whenever you get extra money, make prepayment with it. This will reduce the principal amount of the loan and reduce your EMI as well as the loan tenure. By reducing the loan tenure, your tension will reduce and you will also have to pay less interest to the bank.
Transfer Home Loan
If it has been a few years since you have been repaying your home loan and your repayment record is good, you can get your loan transferred to a lender that is offering lower interest rates. This is called home loan balance transfer. However, be sure to calculate the additional costs before transferring the loan. Like processing fees and foreclosure fees.
Home Loan Overdraft Facility
To reduce the interest rate on home loan, you can avail home loan overdraft facility along with home loan account. In this, apart from your EMI, you can also deposit additional amount in your home loan account. Keeping extra money in the account will reduce your interest amount and loan term.
Benefit in increasing EMI also
If you get a good salary hike, or a good package after changing jobs, you can also increase the EMI. Banks usually give the option to revise the installment every year. If you increase EMI, you will soon get rid of home loan worries.