India HDFC Bank, India’s largest private bank, has been gradually increasing the interest rates on home loans since January this year. There has been no change in the repo rate by the Reserve Bank of India (RBI) since April last year. Even today this is the policy of RBI. There is no expectation of change in repo rate in this also. In such a situation, there is no possibility of reducing the interest rate on home loan. If you have taken a home loan and are worried about paying the EMI and want relief soon, then you can take some measures. We are telling you that solution.
- Make lump sum payment: If you want to repay the home loan quickly, then make as much down payment as possible before taking the loan, so that you will have to pay less interest during the loan tenure. EMI will also be less.
- Choose a shorter loan tenure: Instead of taking a home loan for 20 years, choose a home loan for 15 years. By doing this you will have to pay higher EMIs but you will repay the loan sooner and also save money on interest.
- Make extra monthly payment: Pay some amount extra along with EMI every month. Contributing a little more every month reduces the loan principal amount significantly and shortens the repayment period.
- Choose bi-weekly payment option: Some banks allow bi-weekly payments. This increases the number of payments you make annually, making the repayment process easier.
- Transfer loan at lower interest rate: If the bank from which you have taken a whole loan is charging high interest then transfer your home loan to a new bank for lower interest. This can significantly reduce your monthly payments and the total interest paid during the loan tenure.
- Use the bonus money to repay the loan: If you get money from a bonus, tax refund, or elsewhere, use it to repay your home loan. This reduces your outstanding amount and saves you on interest.
- Avoid taking new loans: Avoid taking additional debt while repaying your home loan. This will help you avoid your financial burden.
- Review your budget regularly: Constantly assess your budget and identify areas where you can reduce spending. This will save your money and you will be able to repay the home loan easily and quickly.
- Get in touch with your bank: Keep yourself updated about the benefits of prepaying your loan. Consult your bank and select the best option. By following these measures you can soon be free from the burden of home loan.
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