Know the ways to reduce EMI as a new Home Loan borrower

[Kanika Shelatkar]

Getting a Home Loan for financing your new house is an exciting prospect. It lets you fulfil your aspiration earlier than anticipated. It is also practical to optimally use your earnings. The equated monthly instalments are manageable with the regular paychecks. But being young also comes with other needs.

A higher EMI restricts your disposable income for them. Hence, it is essential to ensure you reduce it before you apply. Compare and choose the appropriate lender for the same. For this, you get a Home Loan Calculator on their websites that estimate the loan burden. Besides this, you should also try some other methods:

Find reasonable offers: Hunting for a good loan provider starts with comparing. A simple search gives you all the answers to get started. Moreover, most banks have a solid online presence. They mention their terms and offers clearly on their websites. They also provide tools for effective decision making. This includes a Home Loan EMI Calculator. It gives an estimate of the instalments payable in advance. It is also helpful in understanding the lenders' offers.

Property selection: Lenders emphasise the property as it serves as the collateral. They determine your Home Loan eligibility based on this factor. For instance, the amenities and infrastructure of a house affect its resale value. Hence, they charge the interest rate based on this, which thereby affects the EMI. It is best to consider this aspect before finalising the property to get a favourable offer.

Increase down payment: Banks sanction up to 75% to 90% of property value as loan. The rest gets borne by you. However, you can extend this contribution as you seem fit. It presents an opportunity to lower the loan cost. Therefore, instead of sticking to your portion, try applying when you have enough surplus. This way, you borrow less and incur low interest. An EMI Calculator for Home Loan lets you see how much you save by doing this.

Select longer tenure: It is an excellent strategy to get repayment flexibility. Here, you get to stretch the loan term to reduce the EMI. However, this option increases the overall interest burden. Hence, it is best to opt for it when you are okay with the increased cost against the convenience. Also, check its impact on the loan terms for an informed decision. To do this, enter your chosen duration and interest rate in the EMI Calculator Home Loan.

Adjust variables: Another effective way is adjusting your goals against affordability. Consider your desired EMI and choose the tenure, interest, and loan amount accordingly. Use a Housing Loan EMI Calculator to see how they affect each other.