Paying off a home loan can be an expensive affair. Since home loan amounts are usually on the higher side, the mere interest payable on them can add up to more than the loan amount. This does not mean that you can't save money on interest payable.
Here are a few tips on how you can save money on your home loan repayment.
Maximise the down payment
Making a higher down payment has a lot of benefits. It substantially reduces your EMI burden and helps you save a lot of money as interest.
Switch your loan to another lender
If you already have a home loan running, then it is possible that other lenders are offering loan transfers at lower rates. So look out for such offers. It is possible that even after considering processing and loan transfer charges, the offer by new lender might be more cost-effective for you in the long run.
Partial payments can be highly fruitful in the long run
If you can make a partial payment, apart from your regular EMI, it would be highly helpful in the long run. Utilize your Diwali bonus and incentives to make part payments to save a lot of money on the interest component.
Negotiate with the bank
You can save money by negotiating with the bank regarding your interest rate. If you are an old customer, the bank will try to consider your request and provide a lower interest rate.
Prepay your Loan
Prepaying your loan can help slash your total interest payable considerably. Although this requires an abundance of financial discipline and commitment, the long term effects of prepaying your loan can overshadow the struggle of saving up to do so. However, one must bear in mind the prepayment charges, and other charges that go in hand with pre closing your home loan.
Do Research
Not going through research before applying for a loan can cost you a lot of money that can otherwise be avoided. With the numerous online marketplaces that are available at a consumers convenience, it's now easy to compare home loans and choose the best product as per a customer requirement.
Transfer the Balance of Your Home Loan
Home loan balance transfer is a process where a bank takes over the home loan from an existing bank. If you are able to get better services and a lower interest rate from another lender, there is no harm in exploring this option. Through this option you can reduce your EMI and you may get additional incentives also.
Save on miscellaneous charges
There might be some hidden charges applied on a home loan. The borrower comes to know about them at the time when they are actually liable to pay them. Always know the break-up of the EMI to be paid by you in advance. If there are some additional charges besides the interest amount, it is better to find the options that provide the loan without these miscellaneous charges.
Hope these points will help you save some extra cash on your home loan.