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How to reduce Home Loan EMIs? Methods to lower your EMI

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Home Loan EMIs

Lower Home Loan EMIs

You can surely reduce your home loan EMIs by analyzing your financial condition, performing calculations and seeking sufficient guidance. You have several ways of reducing home loan EMIs by lowering the interest rates, prepayments and balance transfer to another bank.

A person having a home loan always thinks of the miraculous ways to reduce the burden. How can I reduce the burden? This becomes your recurring thought in the mind. Well, banks do have certain schemes but these are not promoted well. You must visit your bank or call the officer once to be aware about these schemes.

Some borrowers even think of increasing their EMIs and reduce the tenure. But now, we would be discussion of reducing your home loan EMIs and not repaying it soon. Let us study the following methods of reducing your home loan EMIs.

Never get dazzled by the wordings ‘Low EMIs’ – Look before you leap

If you are receiving calls from bank’s salesmen offering you with low EMIs loans, then always be alert and careful. It must be noted that if you are paying low EMIs for a considerable longer duration, then you are paying more interest amounts. Hence, you must always clarify with the interest component and the principal amount. You do not expect to waste lot of money with the tempting tagline of Low EMIs.

Shifting your loans to other bank

This is also known as balance transfer. This is an effective method of reducing your home loan EMIs. If you feel that your purse is not permitting you to pay the current EMIs, then you can go for these balance transfer. For that, a detailed research of the banks and their existing interest rates is essential. Search and research for the perfect bank. Then, follow their process systematically but do not forget to discuss with the bank about the interest rate component. If the bank is asking you to pay your affordable and desirable EMI, then go ahead!

What if – interest gets lowered and EMI remains the same

Let us remove the low EMI motive from our mind. Now, let us target that we must pay lower interest component to the bank. You can approach the bank with the lowest interest rate. But apply a trick. Do not reduce the EMI. In this scenario, you are brilliantly covering the principal amount component along with less interest component.

You win half the battle here. Whenever the bank offers you to pay lower EMI, and then do the math. You must not increase the duration and pay higher interest. In fact, you must concentrate on covering the principal amount component.

Making part-payments will help in reduction of EMIs

Whenever you get your accumulated savings or funds, you should make part-payment of your home loan amounts. With this, even banks may come to you with low EMI offers. You should be careful with the prepayment penalties. It is charged by some of the Indian banks.

Conclusively, you can skillfully reduce the home loan EMIs in several ways. But do the calculations carefully, seek appropriate guidance and take proper action.

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6 COMMENTS

  1. Great news to lower your EMI costs over the long term for your home loan. A lot of first home owners would like this advice. When you’re new to all these terms, it really helps to be give advice on how to reduce your costs.
    With this article, you can make sense of EMI payments and the difference between EMIs and interest payments and how they relate to one another.
    Hoepfully, one day I will own my own house via a home loan and I’ll already be armed with this helpful knowledge.

  2. Come on! Who doesn’t think that their home loan burden gets decreased ? And there are many ways to decrease them too as one as one pays attention, seeks appropriate guidance and massively takes action.Whether it is part payments or lowering interest rates instead of EMI, when proper action in taken in time, it becomes easy for an individual to pay the loan.

  3. Having to pay a lower EMI is every borrower’s dream. But, as mentioned in the article, one should proceed with caution. Keeping a track on the interest rate and tenure is important. Balance transfer is a good option. But, always read the fine print which also goes for part payment or prepayment of loans. An informative article.

  4. Worth reading to the end !!!! The article really tries to guide the laymen who do not understand financial impacts.Whenever we hear of lowest EMI , we are automatically attracted there , because we tend to think that lower EMI equal lower interest which in turn will require lower cash flows per month.But its exactly the opposite.So people try to select lower interest rates & not lower EMI. Thanks Ankita !!!! keep posting !!!

  5. This is a very useful blog. Some tricks and techniques might save a lot of pennies to families who consider having a house of their own. I never knew that these types of tips ever exist. The points quoted above could be understood easily as it was explained in simple language. This is a very clear blog that can be use as a reference. Nice write author!

  6. A Good Read…Nice tips are always welcome, and when its about EMI’s or Finances, it definitely helps. Liked the point of Lower Interest rate rather than Low EMI’s. But I agree with the point, we need to read or get guidance for these financial matters, and get opinions. Balance transfer is a great option. Quite a helpful article.. 🙂

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