home loan emi calculator

Why Your Home Loan EMI Is Still High And What You Can Do?

Whenever you borrow a home loan, the interest rate payable and loan tenure are the main factors determining the EMI you will need to pay. One of the best ways to calculate your EMI is using a reliable home loan EMI calculator. Here’s how new or existing home loan borrowers can effectively reduce their home loan EMI burden.

Tips to Reduce EMI Burden for New Home Loan Borrowers

To reduce the EMI of home loans, you should first choose a bank that offers home loans at lower interest rates, which is a daunting task. Also, sometimes you may be unable to figure out which bank offers a better home loan deal. 

– Compare Prices Online: 

One of the best ways for home loan borrowers to review offers is online. Various websites and online portals provide a summary view of the interest rates, fees and other costs of different lenders.

– Opt For A Longer Repayment Period For Your Loan:

The longer the tenure, the less your EMI will be payable monthly. However, you should opt for a longer loan repayment period if you think you cannot afford the higher EMI. Using it for a long time will pay additional interest on your outstanding home loan. Before choosing a home loan, you should always calculate the tenure and associated interest rate options. For this purpose, you can use Home Loan EMI Calculator.

– Give More Down Payment:

Home loan lenders can lend you up to 80-90 per cent of the property’s value. Those looking for a home loan must pay a down payment of at least 10-20 per cent. So, make a higher contribution from your pocket. This will increase the qualification of applying for a loan and Increase the chances of loan approval while trying to pay a higher down payment. Make sure you don’t overspend or hinder the achievement of other important goals.

Tips for Existing Home Loan Borrowers

If you are already a home loan borrower looking for a better interest rate to reduce your EMI payments, you can implement some strategies to lower your home loan EMI and reduce your debt load.

– Refinance A Loan By Changing Your Lender:

If you think you are borrowing money at a high-interest rate. You always have the option to refinance. Banks typically offer an interest rate based on the MCLR (Marginal Cost of Funds Based Lending Rate) system, which differs from lender to lender. In this situation, you can switch to another lender that offers a minimum home loan interest rate.

– Negotiate Terms Of Service With Existing Lenders:

If you maintain a good relationship with your existing lender, you can negotiate the home loan terms of service. This way, you can provide a lower interest rate on your loan amount.

– Prepay Your Home Loan From Time To Time:

If you have an excess balance at your bank, you should try to prepay your home loan before the end of the holding period because it can reduce the overall interest payment. You may receive this excess from your annual bonus. A partial loan advance will reduce the outstanding loan balance. Thus, the total interest payable, the amount of your EMI, will be reduced or the repayment period. Lenders generally allow you to prepay either part or all of your outstanding home loan balance.

If you prepay part of the loan, you can reduce your EMI payment by negotiating with your lender. Instead, ask the lender not to reduce the total loan repayment tenure and your EMI amount.

Bottom Line:

Despite the analysis drawn above, home loan interest rates and home loan EMIs for borrowers are still speculative. Suppose you are still paying high EMIs even after the interest rate cut. The reason may be the type of interest rate, such as floating or fixed, or you need to ask your lender to do the same for you, so the best way to enjoy lower EMI is to contact your lender, Discuss and consider your interest rate and sign an agreement while applying for a loan.

By Michael Caine

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