A home loan is an important financial instrument that helps many to opt for it to become the owner of a home. This is a loan provided by almost all financial lenders like banks, HFCs and digital lenders like Canfin home loan or Navi Home Loan. Note that this loan option is available at a pocket-friendly interest rate. However, a home loan is an option with the longest loan tenure and thus needs more of a commitment financially. While the interest rate is affordable, holding this loan for a long tenure can easily drain most of your funds. Thus, it is advisable to prepay your Navi home loan, Canfin home loan or home loan from any other lender early fast as possible with surplus funds whenever you avail them in the upcoming future. The next choice that can save your funds on a home loan is availing of a low-interest rate home. Here in this article, explain how you can reduce your home loan burden.
Home loan interest rates vary from one lender to another. To get a suitable interest rate for a home loan, you should make sure that comparative research is a must. Well, it can be done online just by opening a portal of different banks and NBFCs. To make it easier, you can even approach an online lending market where you can get all the offerings from different lenders in one place. Remember that opting for a home loan is an important financial decision, and hence you should not opt for it without proper research.
Add a co-applicant to this application.
In case you are looking to place an application for a home loan, adding a co-applicant to the home loan application may lower your rate. When calculated for the entire repayment tenure, it can get down your thorough cost of borrowing. Generally, the interest rate is reduced by nearly 0.50 % by adding a co-applicant. Even this increases your eligibility for a home loan and may help you get additional loan funds.
Maintain a Strong Credit Score
Your credit score is a necessary parameter, which is given maximum weightage by the lender for setting the home loan rates. A strong credit score of nearly 750 and more is always looked upon as good by the lenders and gets approval for a home loan at the lowest rate possible. However, in case you apply for a loan and do not have a good credit score, then there are chances that your application for a home loan might be turned down by the lender. Thus, it is necessary to check your score before placing an application for a home loan. If you find that the score is less than 750, then you can follow the important steps to improve it. These steps involve timely repayment of your credit card dues and existing EMIs in totality, maintaining a strong balance between unsecured and secured loans, keeping a CUR of under 30%, and making periodic checks of your credit report to ensure all the information mentioned in it are right. In case of any incorrect information, ensure to report such issues or errors immediately to the respective lender and the credit bureaus for correction. Once corrected, the credit score may be improved automatically, resulting in home loan eligibility enhancement.
Negotiate to Get Better Terms and Conditions with the Prevailing Lender
Lenders thoroughly appreciate responsible repayment behaviour. Thus, if you hold any history of good repayment and have a strong score of more than 750, then you are in a better position to negotiate with your prevailing lender for a good home loan rate. Note that such relations might be in the form of savings, current, fixed, loans, recurring or credit card accounts.
In case you are not able to get the preferred rate on a home loan, you can still negotiate the conditions with the lender, provided you hold a good long-term relationship.
How can you save on your home loan rate once you have applied for the same and met its EMI?
Go for the balance transfer route.
The home loan balance transfer facility is even addressed by the term home loan refinance, which is an excellent medium to reduce your home loan burden. However, this can just be availed on the prevailing home loan. This means if you are meeting your home loan presently, then only you may avail of the transfer route. However, to avail of this route, you must have a strong repayment record and must have served the loan for more than 2 years. When opting for this route, your prevailing loan is closed with your present lender, and the outstanding loan proceeds to the home loan get transferred to the new lender. A home loan transfer facility is generally performed to bring your rate on a home loan to a lower rate or to get favourable conditions on the loan facility. To avail a good deal on the home loan transfer facility, you might approach the customer care of Navi home loan or Canfin Home Loan as they may offer you better terms and conditions at lower rates as per your profile and suitability.
Prepay the home loan whenever it is possible for you
Well, choosing to prepay or route for the part prepayment does not reduce your home loan rate, but doing this can save sufficient funds that you will require repaying as an interested constituent on the home loan. Thus, whenever you take up or get any bonuses, incentives, or savings, use them to prepay your home loan to reduce your interest constituent burden. Doing this will reduce your EMI proceed considerably and your interest amount.
So, whenever you make a part prepayment payment, you are provided two major options – firstly, to reduce your tenure of a home loan, and the second one is to reduce your EMI proceed. Thus, you must opt for the one on the basis of your requirements and move ahead with your decision.