A complete guide on how to reduce your home loan EMI payments

A home loan is a long-term financial commitment, and because of this, most borrowers always seek ways to lower their home loan EMI outgo. Below are some ways that would prove to be helpful for anyone willing to reduce their EMI payments.

Ways to lower home loan EMI as an existing borrower

Existing home loan borrowers can follow the below-mentioned ways for reducing their home loan EMI: 

• Making part-prepayments

While making a prepayment, individuals can pay a certain part of the principal early, thereby reducing the overall outstanding amount, which can lower the tenor or EMI.

• Refinancing home loan

Opting for a balance transfer from lenders providing a lower housing loan interest rate can prove to be a beneficial option for bringing down the EMIs. However, individuals must conduct a cost-benefit analysis to verify that the interest savings are more than the costs of a balance transfer.

• Negotiating for better terms

Depending on the repayment track record and the relationship with the existing lender, borrowers can request a reduced home loan interest rate. This also lowers EMIs.

Ways to lower home loan EMI as a new borrower

Adopt any of the following tips to lower the home loan EMI if you are a new borrower:

• Compare interest rates offered by several lenders and choose the one providing the best one.

• Choose to contribute a higher down payment

• Consider selecting the right home loan. For instance, choosing a loan with a floating interest rate would benefit an individual when the interest rate drops.

• A small loan tenor implies a lower interest payable and high EMIs. So you can consider selecting a long loan tenor as that would make the EMIs smaller.

Now, as you are well aware of the various ways of lowering EMIs, it will help you choose the best way. Besides, ensure to check home loan eligibility before applying.