Home Loan Repayment: How You Can Lower Your EMI Over Time?

Posted by rupee on Thursday, September 6, 2012 Under: Home Loans
The availability of various home loan options in the market, such as Bank of Baroda home loan, HDFC home loan, BHW Birla home loan, etc, have made it easy to buy a house. One of my friends, Suresh also bought his house by taking a home loan of Rs 40 lakhs for a tenure of 15 years. His EMI is Rs 25,000. But the EMI amount gets fluctuate with market trends. If the market rate rises then the borrower would be needed to shell out more money as down payment but if there is a fall in interest rate then borrower would be benefited with it. 

However, many borrowers are not ready to face the situation of increase EMIs due to a constant hike in interest rate. As a result, it becomes important to work on a strategy that can help you in repayment of loan amount comfortably despite of hike in interest rate.  

(1) Prepay the amount if you have surplus funds with you- Whenever the borrower has excess funds then he must prepay the amount. By prepaying, you can reduce the cost of borrowing funds and can make yourself debt free. 

(2) Increasing EMI amount- Those who can comfortably afford to make a payment of higher EMI can also stretch it to the maximum capacity. It will result into long tenure and lesser EMI burden. However, by paying higher EMIs, you can soon become debt-free. 

(3) Switching- If your lender is charging high interest rate as compared to another lender then you can think about switching also. However, you should take into account processing fee and other charges also which a new lender could charge from you.

In : Home Loans 

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