4 Ways to Lower Your EMI for a Home Loan
An Equated Monthly Installment (EMI) is one of the biggest burdens one might face after taking a home loan. An EMI is the monthly payment of each quote of your loan covering capital and interest rate. It’s usually focused on covering the latter when you start paying. As time goes by, the interest gets lower and you’ll cover the capital portion of it. Your monthly EMI is usually determined by the conditions you negotiate when you close the deal on the loan. New City Financial wants to teach you some ways to work around EMIs and get a lowered monthly quote.
Let’s pay attention to these pointers to make life a little easier while getting our home.
- Put a higher down payment
The best first step you can take when dealing with a housing loan is to lay down the biggest down payment you can. You may kill all the capital you have, but going for 25% to 30% over the standard 20% will have a significant impact on your EMI, as you’ll save money and the interest rate won’t hit you hard.
- Make early prepayments
If you are able to amortize the debt, you’ll be doing yourself a huge favor. Not only you’ll be showing your lender financial responsibility, you’ll be paving the way to ask him to lower your interest rate and reduce the EMI burden.
- Work with a bank
Building a good relation with a financial institution helps your credit history and keeps them open to do business with you. If you’ve taken a loan and you are struggling with your EMIs, you can always work out a deal with your bank to have them pay for your loan and offer you a lower interest rate.
- Ask for extended tenures
When you take a home loan, going for the shortest tenure to pay it back may not seem like the smartest choice. The interest rate will eat up your money, and you’ll still have to cover for other daily expenses. If you go for an extended period, payments will be easier to handle; as the main debt and the interests that compose your EMI will be divided in a larger number of months.