5 crucial factors that affect your home loan interest rate and steps to reduce it - Loan Trivia

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Monday 7 February 2022

5 crucial factors that affect your home loan interest rate and steps to reduce it

home loan interest rate
Are you dreaming of buying a property of your own? 

If you have not saved enough or lack funds, then you may like to apply for a home loan. Based on your home loan eligibility and lender’s policies, you can get an amount. 

But, if you avail a home loan, you will also need to pay off the home loan interest rate. 

Your current home loan interest rate may be determined by factors like your age, CIBIL score, tenor and more. 

Do you know 5 essential factors that can affect your home loan interest rate and how to reduce it? Go through this post!

  1. Your credit score 

Your credit score is affected by your debt and repayment history. If you have paid your loan debts and credit card outstanding on time, your CIBIL score will be higher. In turn, it can help you enjoy a lower home loan interest rate

  1. Your source of income 

If you have been consistently employed with an uninterrupted source of income, your lender may assume that you will pay off your EMIs on time. Thus, your lender may offer a lower home loan interest rate. 

  1. Your home loan eligibility terms 

If you meet your lender’s eligibility terms and furnish documents as required, you may get an affordable home loan interest rate. 

  1. Your age 

If you apply for a home loan at a young age, your lender may offer a large amount at a reduced rate. It is because you have more workable years left than an application nearing retirement. 

  1. Your home location 

If a chosen home is located in a known area with better infrastructure, your lender may offer a lower home loan interest rate. It is because they may find it easier to liquidate the property in case of defaults. 

You are now aware of the factors that affect your home loan interest rate and how you can reduce it. 

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