New Delhi: Several banks in the country are giving a stiff competition to each other in the home loans segment this festive season. Also, Reserve Bank of India’s (RBI’s) recent decision to keep the key interest rates unchanged have come as a big respite for borrowers who are grappling with the onslaught of the COVID-19 crisis and trying to survive the downturn.
The home loan segment is dominated by banks that give lucrative offers with the rate of interest being the key element for buyers to choose a particular bank's home loan.
Meanwhile, if you are an existing borrower, check out these 5 tips on how to reduce your home loan interest rate.
1. At the current rate of interest on loans ranging from home to auto, customers who can afford to tweak the principal and tenor will be able to arrive at an EMI structure favouring their debt-to-income ratio better.
2. When the interest rate drops, customers who have availed floating rate of home loan, will invariably pay EMI at reduced interest rate.
3. Whenever you are in possession of some surplus money, you can funnel it towards your home loan as a form of part-prepayment. This will result in huge interest savings in the long run. Those with floating interest rate on home loans can benefit from this.
4. Choose your lender wisely. If you think your current lender has a higher interest regime, you can consider a home loan balance transfer depending on the new lender who is offering a better rate of interest on your home loan.
5. Also remember to keep your CIBIL score high and your debt-to-income ratio low. This will help you get a minimum home loan interest rate.
(Disclaimer: This is just a broad description and in no manner intended to be of any financial advice. For further clarity you can check with your bank)