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Get used to making prepayments

Prepayment is a great option to lower your overall interest on your home loan. You can repay a certain amount from the principal loan amount through this option. Ideally, you pay more for the interest than the payments made for the principal amount in the first few years. If you frequently choose prepayments, it will significantly reduce the principal amount, which will reduce the total interest rate.

Don’t forget to check with your lender or bank if there are any fees on prepayments of fixed rate loans. Generally, banks do not have prepayment charges on floating interest rates on home loans.

Search for better deals

There’s no denying that lenders love a good borrower, meaning someone with a good credit history. It’s like reassuring the lender that they can repay the money while respecting all the predetermined terms and conditions.

Banks often offer favorable terms and reduced rates for existing customers or those who can show a good credit history. If you don’t have a good credit rating, you can try to negotiate a better deal, provided you have a good business relationship with your lender. In other cases, you can look for festive or seasonal offers.

Prepayment is a great option to lower your overall interest on your home loan.

A substantial down payment

Here is another option to lower your interest rate. If you contribute a substantial amount as a down payment in the initial phase of your loan, your loan amount will most likely be lower. As a result, you won’t have to worry about paying a huge interest rate.

Balance transfer

A home loan balance transfer is a feasible alternative if you are paying a high interest rate for an existing loan. However, this option is only applicable if you have already started paying EMIs on a particular home loan. If you feel that the current interest rate charged by your lender is higher, you may choose to transfer the outstanding balance to another lender for a lower interest rate.

Although it is a possible option, loan transfer should be the last resort when you run out of all other options. Also, remember that any missed payments on such transfer-based loans can lead to heavy penalties. So, think twice before taking the plunge!

Increase your NDEs

This is a well-known tactic preferred by most borrowers. The longer you delay repaying a loan, the higher the interest rate. So, if you increase your EMI amount, not only will your loan be repaid in a shorter time, but it will also lower the interest rate significantly.

Final Thoughts

Loan repayments won’t be a stress if you follow these nifty tips. Also, a better tip would be to do a thorough research online comparing home loan interest rates today!

Disclaimer: (This article is sponsored and includes commercial links)

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