One of the most crucial things which any loan applicant desirous of availing loan facility is anxious to know is the rate of interest which shall be applicable for his home loan. But did you know that there do exist some ways and means by which you can get your interest factor reduced? Read this post for more details.
We understand the pain of higher rate of interest which customers like you have to bear when you think of buying your dream home. However, if you keep in mind some simple but important things, you may be one of the lucky few who will be able to walk away with a relatively lower rate of interest. Let us see some important pointers which will help you:
- Go for Shorter Duration Loans
The shorter the duration, the heavier will be your EMI. However, at the start of your career, a shorter duration loan can work in your favour. It helps you to avoid paying the additional interest factor which starts getting compounded subsequently. So a pinch on your pocket today can help you in the long run! However, ensure that you do not overburden yourself too with the EMIs.
- Exceed your Budget
Although this is easier said than done, it helps you in reducing your interest portion of the loan considerably. Thus, if your EMI is say, Rs 10,000, then it is wise to exceed this figure and pay a little extra every month. Not only will it help in bringing down the principal amount considerably, but the rate of interest applicable will also be on a lesser amount lowering your overall burden. However, ensure the lender you choose does not charge any penalty on part prepayment.
- Maintain a Good Credit History
Keeping a good credit score goes a long way in helping you get the best home loan interest rates possible. Paying your credit card bills on time and your EMIs on time will ensure your credit score is high. And a good score goes a long way in negotiating the best deal with your lender.
- Switch and Save!
With the help of Balance Transfer Loan, you can switch from your existing lender to a fresh new lender who is ready to offer a comparatively lesser rate of interest. However, make sure you read the terms and conditions carefully before switching.
- No Gifts and Frills Please!
Follow a ‘no gifts’ or no frills attitude when you go for a home loan. These days almost every lender is out to lure and add customers to its business, and they do this by offering you ‘unbelievable’ offers. As a first timer to a loan process, you may get attracted to such schemes and offers, but in the long term, you may end up paying much more than the expected rate of interest. Hence, go for a lender who does not offer you any fancy frills and freebies.
Keep these tips in mind if you are contemplating a home loan in the near future. lower rate of interest along with your dream home!
Interest rates is among the most important factor to consider while opting for an institution for Home Loan. IIFL Home Loans is a non-banking financial institution which has hassle free loan process and lower interest rates.