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How to Lower Home Loan Interest Burden

· Home Loan Transfer

Buying a home isn’t possible without taking a home loan as long as you don’t belong to HIG or income-based categories above. That said, if your income is not sufficient and you lack a credit history, convincing the lender and getting approved for a home loan at low interest rates eventually becomes even difficult than belling the cat.

People with lower credit eligibility often have a hard time getting approved. Even if they get approved, they are saddled with a very high interest rate. If you are stuck with the same kind of loan or you’re being offered a housing loan at a very high interest rate, following are the things you can do to lower down the interest burden.

Pay a higher amount as down payment: If you pay a high amount as down payment, you’ll need a smaller amount as loan. This decrease in loan expectation will lower down your loan-to-value ratio and hence, the lender would have to negotiate the interest rate in your case owing to the decreased risk of lending.

Increase your loan tenure: You can also raise the tenure of your loan so your EMIs will spread for a longer tenure, and the repayment burden will decrease. Though doing this would also increase the payable interest amount by a considerable percentage.

Home loan balance transfer: Lastly, if home loan has already been sanctioned, you can opt for home loan transfer. Balance transfer usually takes place between two lenders wherein the second one is offering a loan at a lower interest compared to the first lender.

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