Taking a home loan is often necessary to fulfill the dream of owning a property, but it’s also a significant financial commitment. The burden of a home loan can last for years, and with rising interest rates — now around 9.5% to 10% — EMIs have increased significantly. So, how can you reduce this burden?
First, check the interest rates offered by other banks. If they offer lower rates, consider transferring your loan, but be sure to factor in any transfer fees and the overall benefit. Some banks offer reduced or waived processing fees during certain periods, like the financial year-end or festive seasons, so keep an eye on such offers.
Home loans typically come with two types of interest rates: Fixed and Floating. Fixed-rate loans have a constant interest rate for a set period, generally 1.5–2% higher than floating-rate loans, which are tied to RBI’s key rates. Most loans today are on a floating-rate system.
When interest rates rise, some banks may extend the loan tenure instead of increasing the EMI amount, which keeps your monthly payment stable but increases the total repayment amount over time. In such cases, reach out to your bank or NBFC for a better deal. If no positive response is received, transferring the loan to another bank with better rates could help you save significantly.
By carefully evaluating these options, you can make informed decisions to reduce your home loan burden.
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