Home Loans are one of the most popular loan options among people. You must be thinking about the reasons behind its popularity. Well, the first thing everybody wants to own their own homes but due to the high prices of it, not everybody can afford to pay the full price in one go. This is why individuals want to opt for a Home Loan. Lenders provide the required loan amount to customers at affordable interest rates for a maximum tenure of 30 years. Within the tenure, customers can easily repay the loan via EMIs.
Home Loans are generally considered to be high-ticket purchases and people take it for a longer duration. This is why it is important to ensure you save a substantial amount while going for a home loan. In this article, we will be telling you about some of the most useful methods with which you can easily ensure maximum savings on your home loan. Some of them are choosing lower interest rates, prepayment facility, balance transfer facility, higher down payment amount, etc. When you apply these methods while going for a home loan, they could prove to be really useful. So, if you are going to take a home loan and want to take care of your pocket, read about these methods.
Choose Lower Interest Rates
The first thing that you can do to make sure that you save a huge amount is to choose a lender with lower interest rates. When you opt for lower rates, your EMI amount would be lower and so would be your interest outgo. Since home loans are taken for a longer period of time, you could end up paying a huge interest outgo if you choose a higher rate. So, always compare multiple options before going for a suitable option. Home Loan interest rates depend on several factors such as Employment Type, monthly income, property location, Credit Score, etc.
Opt for Prepayment Facility
Do you know that you can choose to pay your outstanding principal balance in both full and part with the help of the Prepayment facility? Well, yes. You can do it. When done in parts, this is known as a Part-prepayment facility. On availing this facility, customers can save a huge interest outgo as their principal balance will be reduced and hence, their EMI amount will also be reduced. Lenders ask for fixed prepayment charges for this facility that tends to vary from one bank to another.
Opt for a Shorter Tenure
As we said home loans are generally taken for a longer period of time usually 15 to 20 years. So, the longer the tenure, the higher would be the interest outgo. That’s why it is advised customers who are going for a Home Loan to opt for a shorter tenure if their finances allow you to do so. With this, the EMI amount may become higher but you can save a substantial amount on the interest outgo.
Opt for Balance Transfer Facility
One of the amazing methods to ensure savings on your home loan is to go for a Balance Transfer facility. How? Well, you can transfer your current outstanding balance to some other lender at lower interest rates. Due to lower rates, you can save both in terms of EMI amount and interest outgo. Each lender charges a definite Balance Transfer Fee that depends on the outstanding amount. It’s just, customers should have a good credit score (considered to be 700 or above) if they want to opt for this facility on their home loan. Other than this, lenders also check the property before sanctioning the Home Loan balance transfer facility.