Considering how big a responsibility is to bear a home loan, people invest so much time and efforts to make the decision right! We can’t undermine their enthusiasm as such people are aptly motivated to acquire their dream home, which totally justifies their level of efforts. Finding an ideal housing loan option isn’t an easy task as it involves evaluating everything from home loan interest rates to the list of processing fees one has to pay!
It is totally justified as for why most loan aspirants are so keen to find the cheapest home loan interest rates they could dig. While paying EMIs to repay principal amount, the borrower also pay for interest amount, which can adversely affect their monthly finance planning. And if you think you can’t do anything to reduce interest burden on repayment, following pointers might open your eyes:
Boost your credit score!
Not many people realize but with a good credit score, you could get reduced home loan interest rates but also stand a chance to negotiate an extension on your limits on the loan amount. The loan lending party would allow such benefits as your credit score reflects the financial capability to repay any loan you’ve taken in past. Although most loan lenders consider CIBIL of 750+ as a good credit score, norms could change from one loan lender to another. If you are in the planning phase, it would better to boost your credit score before you meet the loan lender for an ideal housing loan.
Rather choose a shorter tenure period!
When it comes to opting for a housing loan, most aspirants follow thumb rule of deciding tenure period and go with the longer one! This is also effective as with longer tenure period makes the home loan interest rates go lower and more manageable. But then, if you have the financial capability to pull off a shorter tenure period and bear higher interest rates, then why not? The only problem with longer tenure on a home loan is you will be paying interest amount for an extended period of time. And with shorter tenures, you can not only pay appropriate interest amount but also get free from the home loan.
Longer tenure is still beneficial!
We are not trying to confuse anyone, but you would be still at a win-win side, even if your economic profile suggests you to pick a longer tenure period! It will not only lower home loan interest rates but also adds weight to your home loan application. For a home loan lender, a person choosing longer tenure reflect consistency and the ability to repay the loan amount, no matter how long it takes. Most housing loan provider value ambition of an individual to own their dream house, over their financial capabilities!
Set prepayment goals!
Although Apnapaisa home loan interest rates are fairly reasonable, you can even reduce it while following a regular EMI cycle. Most housing loan lender let you prepay the principal amount before tenure period end and charge interest on the outstanding amount. This can be a good opportunity to make use the extra savings or a bonus to pay additional EMI which would reduce the principal amount. To a salaried person, finance experts would suggest increasing their EMIs by 5% each year, which would be a good use of salary appraisal.