Home Loan Tips: If you dream of building a new house, don’t worry. Do you know you can build a new house with a home loan? RBI has given the gift of reducing the repo rate in its meeting, which is why enthusiasm is seen on the faces of the loan holders. Currently, the bank’s home loan interest rate is between 8 and 12 percent.
After the RBI’s decision, the EMI of the home loan will also be reduced. You can build a house by taking a loan at low interest rates. If you keep some essential things in mind while taking a home loan and some time after, you can reduce the EMI. You can learn how to reduce EMI below, where there will be no confusion.
Take a short-term loan.
The EMI of the home loan depends on many things. The loan amount, interest rate, and loan period are essential. A short-term loan works to reduce the EMI a little more, but at some interest. On the other hand, the EMI is also less in long term loans, but the interest needs to be paid very high.
Use this thing wisely.y
In the initial years of your home loan, a large part of the EMI goes only to paying the interest. When you have extra money, make a prepayment for it. This will reduce the principal amount. Both interest and long-term will reduce. There is no prepayment charge on floating rate loans.
How to compare interest rates online
Do you know that comparing the interest rates of different banks and housing finance companies is necessary before taking a home loan? This can also help you get a better deal. Along with this, it also helps in bargaining. On the other hand, if your bank’s interest rate is high, transfer the loan to another bank at a lower interest rate.
Especially if your existing bank is not transferring the benefit of repatriation, there will be no penalty for transferring the loan to a floating rate. However, it is essential to calculate the processing fee, legal charge, and other expenses.
Benefits of making a higher down payment
For your information, if you take a home loan, you must make a down payment of 10% to 20%. If you can make a higher down payment, the principal amount of the loan becomes less. This reduces the interest rate, and the burden of EMI is decreased considerably.