4 Tips to Prepare Yourself for Home Loan Rates Hike - Loan Trivia

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Tuesday, 29 January 2019

4 Tips to Prepare Yourself for Home Loan Rates Hike

The first thing that customers consider when applying for a home loan is its interest rate. High interest rates can eat up a considerable chunk of your monthly budget till the end of the tenor. The interest rates of home loans are rising and here are some ways to prepare yourself with it.

1. Be Careful while Selecting the Lender

It is important to choose your lender carefully; else you might end up paying higher EMIs. The best way to select the lender apart from comparing the services they provide is by comparing the interest rates of home loans with the help of EMI calculator. Also, only choose a lender which is linked to MCLR as they offer a better mechanism to fix rates and greater transparency.

 
2. Go for a Short Tenure

A shorter tenure enables you to pay less compounding interest over the term of the home loan. Use the calculator to adjust the loan tenure and check its associated EMI so that it can match your income.

3. Make Consistent Prepayments

The first half of your repayment involves making payments towards the levied interest than the principal. Hence, you can focus on making prepayments as it lessens the levied total interest on you. Choose a lender who does not charge for making part prepayments.

4. Use the Home Loan Balance Transfer

You can transfer your existing home loan balance to another lender, who offers a lower home loan interest rate, is linked to MCLR, and does not charge on making part prepayments. It will help to bring down the overall cost of the home loan.

Interest rates on home loans are rising, and these tips can go a long way to prepare yourself for it.

Read Also: How to Prepare for Rising Home Loan Interest Rates

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