Last Updated on March 20, 2022 by azamqasim
With the Reserve Bank of India keeping the repo rate unchanged at 4%, many financial institutions have reduced their housing loan interest rate in India to attract more customers. The current rate cut has given aspiring home loan borrowers a lucrative opportunity to fulfil their dream of purchasing a residential property.
However, aspiring borrowers must ensure they have the required funds and a sufficient income to keep their loan burden affordable and make timely repayments. They should also note that their interest rates are subject to change with revisions in repo rate and such benchmarks. Any increase in the financial policies would lead to a proportional increase in their housing loan interest rate.
Individuals should, therefore, be mindful of the factors that affect home loan interest rates in India to ensure that their repayment liabilities remain nominal. In this regard, one could adopt measures to lower their interest burden, even when the rates are now at their lowest.
Tips to avail the lowest home loan interest rate
Improve CIBIL score
A borrower’s repayment history for existing debt can significantly impact the credit score. This is why it is essential to maintain a strict routine while paying monthly EMIs. Most financial lenders check the credit score before approving a loan amount. Hence, to be eligible for lowest interest home loan, individuals need to maintain a credit score of 750 and above to maintain a good credit history.
Different financial lenders offer various interest rates. Some lenders might have similar interest rates but levy additional fees. Hence, it is essential to know these hidden additional charges on home loans to determine which home loan will allow them to save more in the long run. Knowing these processing fees and charges will help individuals to plan their repayment accordingly.
Negotiate with a lender
Existing customers of several lenders can choose to negotiate the interest rate offered to avail discounts. If they maintain a good repayment history, lenders might choose to give in to their demands and lower the interest rate levied.
Borrowers are, therefore, encouraged to maintain a good relationship with existing borrowers to ensure that they can avail convenient terms when they borrow credits in the future.
Moreover, some reputed housing finance companies provide pre-approved offers to existing customers to make the loan application process hassle-free and swift. Such offers are exclusively offered on several other financial products such as home loans, loans against property, and more. All you have to do is to share your name and contact details to check your pre-approved offer.
Choose shorter tenor
While choosing a longer tenor lowers home loan EMIs, it increases the overall interest outgo. Lenders also levy a higher interest rate on individuals opting for a longer tenor. It is, thus, essential to select tenor carefully using a home loan EMI calculator, which will also provide individuals with a fair idea about how much EMI they will need to pay at the end of each month.
Refinance loan amount
If a borrower is currently servicing EMIs at a higher interest rate than what other lenders are offering now, one can choose to shift his/her remaining loan amount to some other financial lender that offers lower interest rates.
Furthermore, on opting for refinancing, some leading housing finance companies also benefit individuals with a top-up loan facility with an affordable interest rate.
Therefore, following the tips mentioned above, individuals can be eligible to apply for low home loan interest rates in India, allowing them to repay their loan amount efficiently without neglecting other financial obligations.