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5 Ways to Reduce Home Loan EMIs
Posted on Saturday, November 25th, 2023 | By IndusInd Bank
There are ways for both new and existing home loan borrowers to reduce their loan EMIs. These include a. choosing a longer repayment tenure b. making a bigger down payment c. negotiating for a lower interest rate d. making prepayments e. opting for home loan balance transfer. IndusInd Bank home loan is marked by a unique set of benefits, making it an ideal option for new and existing borrowers a like.
For most home buyers, a home loan presents the most convenient option for purchasing their dream home. A home loan enables access to adequate funds while allowing the borrower to repay over an extended timeline. All the same, it is also the biggest liability, taking away a substantial portion of monthly income towards payment of Equated Monthly Instalments EMI. No wonder that home loan borrowers are constantly on the lookout for ways to lower their EMIs. Luckily, there are several ways for borrowers to reduce their home loan monthly payments.
The table below details 5 simple ways in which home loan borrowers – both new and existing – can reduce their home loan EMIs.
| New Home Loan Borrowers | Existing Home Loan Borrowers | ||
| 1. | Opt for a Longer Repayment Tenure A longer tenure results in a lower EMI amount as the number of EMIs increases. On the other hand, a shorter repayment tenure results in a higher EMI amount but brings down your overall interest outgo. However, with the former option, your overall interest payments increase as you pay interest over a longer time period. You could use a home loan EMI calculator to estimate the most manageable EMI amount within the shortest possible tenure. | 4. | Make a Prepayment Repaying a part of your home loan reduces the outstanding principal amount, thereby helping reduce the EMI amount and helping you repay the loan earlier. It is important to note that you may be charged a penalty for making a prepayment if you opted for a fixed rate of interest. There is, however, no prepayment penalty with a floating rate home loan. |
| 2. | Make a Larger Down Payment The higher the down payment, the better. A substantial down payment reduces the amount you borrow. Consequently, your EMIs will be lower as EMI payments are calculated on the principal amount. What is more, a lower loan amount will also lower the interest to be paid, making your monthly instalment more manageable. | 5. | Go for Home Loan Balance Transfer Home loan balance transfer or refinancing, in which the outstanding loan amount is transferred from the previous lender to a new lender at a lower rate of interest can help you lower your EMIs, and help you repay the loan with ease. However, it is most prudent to opt for balance transfer in the first half of your loan tenure. Since the EMIs are focussed on the interest amount at this time, a refinanced loan at a lower interest rate will help you save more. |
| 3. | Bargain for a Lower Rate of Interest If you have a good credit score, most banks will view you as a reliable borrower. This can help you negotiate better for favourable interest rates, and repayment terms & conditions. It is therefore recommended that you put forth all sources of income. Additionally, having an existing, positive relationship with the lender could help you arrive at a lower home loan interest rate. |
Home Loan from IndusInd Bank – What’s in it for You?
Whether you are a new home loan borrower or an existing one looking to lower their home loan EMIs, it is important to shop around and find a lender that offers a home loan with the most competitive interest rates as well as favourable terms and conditions.
A home loan from IndusInd Bank presents one of the best options for both categories of borrowers on account of the following benefits:
- Competitive rate of interest
- Home loan transfer facility
- Simplified documentation
- Transparent procedure with no hidden charges
- Doorstep assistance with quick and easy processing of home loan application
- Efficient and prompt customer service
- Option to select from inventory of pre-approved projects for funding
- Wide array of home loan products to choose from, including top-up loan, plot plus construction loan, home renovation loan, and specialised offerings to NRI customers among others.
With so many advantages, an IndusInd Bank home loan promises an excellent way forward to anyone looking to embark on, or restart a smooth home loan journey.
Visit the IndusInd Bank website to apply for a home loan today.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
