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How to Reduce the Interest Rate of a Home Loan?

· home loan interest

When you take a Home Loan, you also need to repay it within the stipulated period of time. It is always advisable to choose your Home Loan in such a way that it never becomes a burden on you. It will be better if you use the Home Loan EMI calculator to calculate the exact EMI amount by putting the loan principal amount, loan tenor and the rate of interest. On the basis of these three factors, your repayment amount will be dependable and the rate of interest will decide how much interest you have to pay to the lender. You should always try to avail the lowest Home Loan interest. Here are some of the ways that will help you to avail a lower interest rate:

Higher Down Payment

When you decide to apply for a Home Loan, try to make a higher down payment. No lender approve the entire value of your home, as Home Loan. You can only get a Home Loan up to 80% to 85%. The remaining 15% to 20% needs to be arranged on your own as the down payment. So, if you go for a higher down payment, your repayment amount will decrease. This is one of the ways to reduce the interest rate and pay only a considerable portion as you already make a higher down payment.

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Home Loan Prepayment

The lender you have chosen for Home Loan application should not be charging any prepayment fee. If you have some extra money with you due to salary hike or performance bonus, you can always opt for a part prepayment of your Home Loan. This will help you to reduce the interest burden and the Home Loan EMI as well.