Planning to buy a new 2bhk Flat in Gurgaon but worried about the monthly home loan EMI and loan interest rate? We understand that home loan can be stressful and can create a big mess in your monthly budget. You also have to take care of the loan tenure, interest rate, and loan amount. Due to poor planning, you may often end up paying more against the loan amount.
But don't worry, we have everything chalked out. So, if you plan to take a home loan at reduced interest rates for an apartment in Gurgaon, you must go through the entire article.
6 steps you may follow to decrease your home loan interest rate.
1. Increase your EMI Amount
Many financial institutes and lenders allow you to change your installment amount annually. So, if you have recently shifted to a job with a higher salary, you can always opt for a higher EMI. This will reduce the tenure period, and once it is reduced, the overall interest payable against your loan will come down substantially. Always check with your lender whether they offer these options or not.
2. Apply for a Short Tenure
The loan duration amount is one of the main factors responsible for calculating the interest rate you are supposed to pay. Many banks claim that 25 to 30 years of tenure will cut down the monthly installment amount. However, smaller 10 to 15 years tenure will reduce the overall interest rate. So before applying for a loan, you need to choose that tenure period carefully so that you do not end up paying more.
3. Try to pay more Down Payments
Most financial institutions and loan providers finance about 75 to 90% of the total property value. So you have to contribute about 10 to 25% of the remaining cost of the property. In simple words, you have to pay the rest of the money as a down payment. So the higher amount you pay initially, the lower would be the loan amount. Therefore it will reduce the payable interest rate.
4. Compare Bank Interests Online
Before applying for a home loan, it is advised to do proper research on the various loan products and compare the rates before deciding on a lender. On the internet, you will come across hundreds of third-party websites. They will help you get a clear picture of the interest rates and the difference between the charges levied by various lenders. So, always remember to compare the various bank's home loan interest amounts before deciding on a particular bank.
5. Negotiate for Better Deals
Lenders and financial institutions always prefer customers who have a good credit score. Many banks often offer preferential rates for existing customers who have a good credit history. So if you have a credit score of more than 800, you will receive better rates on your loan. However, if you don't, you may have to negotiate with the lender and build a good business relationship with them. Apart from this, you can always keep a close eye on the various discounts and offers during festive sessions.
6. You can always try Prepayment
Most lenders and financial institutes do not charge prepayment or foreclosure charges on floating housing loans. So, if you have applied for a home loan, try to make small prepayments as regularly as possible. This is because, in the first 5 years of your loan period, you will be paying towards the interest compared to the principal amount. So, if you do frequent prepayments, it will substantially decrease the principal amount, which will in turn reduce the total interest.
But you need to know that lenders may charge a certain fee for fixed-rate loan prepayments. So, before applying for a loan or prepayment, confirm with your bank whether they will charge extra or not.
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