Smart Ways To That Can Reduce Your Housing Loan Interest Rate

Repaying your home loan can be a challenging task, and if not approached accurately, a home loan can disturb your monthly budget and take a toll on your finances. Therefore, many people constantly look for ways to reduce their housing loan interest rates to ease the burden.

Hence to ensure that you get the most comprehensive home loan at competitive rates, below are some tips that you can keep in mind to reduce your home loan interest rates -

Housing loan prepayment

The housing loan sum significantly remains influenced by the interest rates applied by the financial institutions or banks.

For instance, a home buyer takes INR 40 lakhs from a financial institute at an interest rate of 9% for 20 years duration. Then they need to pay INR 43 lakhs interest amount on loan, making the cumulative sum a whopping 83 lakhs. Hence to avoid this and reduce home loan interest rates, consider prepaying the loan's principal amount.

Compare loan interest rates online

Another tip to reduce your housing loan interest rate is to compare the loan rates before settling on a particular financial institution or lender.

Also, note that various third-party websites can provide a more precise understanding of the rates and other expenses charged by different lenders. Thus, it is better to initially evaluate the home loan interest rates of all financial institutions and then choose a home loan product.

Home loan transfer to another financial institution

After comparing and evaluating the home loan interest rates with other lenders, you can try transferring your home loan to another financial institution that offers lower interest rates.

However, note that these new financial institutions will view your home loan transfer application as a fresh request and impose application charges, processing fees, etc. Therefore, before transferring the home loan to another financial institution, it is prudent to calculate these new charges.

Pay a higher down payment

While this is not always attainable for many people, try to make a higher downpayment for your home loan to reduce your loan interest and EMI significantly. In addition, a higher down payment likewise improves the possibilities for loan sanctions as banks, and financial institutions consider such loan applications less risky.

Choose a longer term for your housing loan

While applying for a housing loan, young homebuyers must always go for a longer housing loan tenure to repay the loan sum. Doing this will help them relieve the EMI burden and improve the loan eligibility as a borrower. Also, to avoid larger interest sums, new homebuyers must go for early prepayments as their income increases.

The bottom line

Even when getting a housing loan has become an effortless task, the repayment can be challenging. Therefore, it is crucial to consider the tips above to reduce your housing loan interest rate. Also, if you are looking for a home loan at the most affordable interest rates, PNB Housing can be your one-stop destination.