First things first!
If you are planning to invest in a brand new home using a home loan, you need to know that you will need to repay it and home loan EMIs can eat your savings. However, if you follow some tips and research, then you can avail a better home loan deal.
In the context of the discussion, let’s know some of the handy tips that will help you lessen your home loan interest rate burden significantly.
- Maintain a robust CIBIL Score
The higher is your CIBIL Score, the better will be your chance to lower your home loan rates in India. Yes, lenders award the best home loan deals to people who have a Credit Score in the range of 750+ or more out of 900. Your home loan interest rate rises up when your CIBIL Score goes down. Thus, if you wish to save some money and lap up a lower home loan rate, you will need to ensure to maintain a strong CIBIL Score. Some of the quickest methods to enhance your Credit Score is:
- Paying off existing loan debts on time
- Clearing the outstanding on your credit card before the due date
- Paying not less than the required EMI amount on multiple debt platforms
- By not applying to multiple debts/credit cards at the same time
- By not carrying too much debt
- By not having multiple credit cards
- Put down a higher down payment
While availing a lower home loan interest rate, you can put down a higher amount as the home loan down payment so that you can pay lower EMIs and interest rate. No lender will approve a full value of your home that you wish to buy and the maximum that you can avail is 80-85%. The rest of the amount (10-15%) is required from the borrower’s end. The higher you put a down payment, the lesser will be your loan interest rate.
- Go for a longer tenor
When you select a longer tenor, the principal, as well as home loan interest rates, is stretched over a larger number of months. Hence, you will end up with a smaller EMI outflow. At the same time, you will be paying the home loan EMIs and interest for a longer period. As a result, you could be paying larger interest over the entire tenor of the housing finance.
- Negotiate with your lender
If you are associated with a lender for a long time and have availed many loans earlier, you can ask the lender for a reasonable home loan interest rate. Being an old customer can help you enjoy a better rate as the lender is aware of how good or bad you are in clearing debts. If you have made all repayments on time with the lender, your lender may consider offering a better interest rate.
- Having a consistent employment history works
If you have a consistent employment history, then you can reap the rewards of lapping up a lower home loan rates from lenders. If you have not switched jobs frequently, the lender may consider you as a safe case and award with a lower home loan interest rate.
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Being able to bring down the home loan rates even by thousands by implementing the discussed tips can help you in the longer run. Go ahead and follow the discussed tips and march towards a better home loan rates and save your money! All the best!