Articles
Tips to reduce interest rate on your home loan
by Amar Chauhan StudentOne of the
best ways in which you can reduce the interest rate that you could be charged
on your home loan would be to go for a longer repayment period. It is common
knowledge that the time you take to pay your loan back plays a major role in
determining the interest that the lender charges from you in these cases. If
you take 25 to 30 years to pay your loan your lender would charge you a lower
rate of interest than if you want to pay off the same amount in 10 to 15 years.
However, in a longer loan repayment tenure, you would be paying a higher
overall interest amount.
Go for
prepayments
These are
also a great option if you are looking to lower your home loan interest rates.
This is especially applicable when you have a floating-rate loan as lenders do
not charge money for foreclosing or prepaying the loan. So, in case you have
availed of such a loan, it is better that you keep making prepayments from time
to time. This is because in such a loan in the first few years you would be
paying more towards paying off the interest than the principal.
Comparing
interest rates
This is
perhaps the most appropriate way – if not the only one – of getting the home loan with low interest rate that
you are looking for in these cases. You must perform proper research in this
case and compare the rates before you decide on choosing any particular lender
or loan as such. These days, it has become easier to get such information
because of the presence of so many third-party websites. Thanks to these
service providers you would have a clear idea of the charges and rates levied
by various lenders on these loans.
If you are not satisfied with your present lender you can always transfer the loan balance to a better service provider such as Piramal Finance. However, please remember that this would only be applied once you have started to make prepayments on the loan. Usually, people go for this option when they feel that the lender is charging too high an interest rate on the repayment of the loan. The benefit of such a balance transfer is that it helps you switch to a lower interest rate. However, please keep in mind that this should be the last resort in these cases.
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About Amar Chauhan 
Student
0 connections, 0 recommendations, 12 honor points.Joined APSense since, November 7th, 2021, From Mumbai, India.
Created on Dec 5th 2021 23:41. Viewed 252 times.
