Tips on Home Loan to Save Your Money
The rising property rates have brought the option of home loan to many home dreamers.Home Loan is a good option for all those who can’t pay the property amount at a time. Once you have finalized the property the next question comes in mind of the home loan and the finance companies in the market.
There is a tuff competition between the financial companies for offering the best interest rates and the other facilities also.
Tips on Home Loan to Save Money –
- Do Proper Research
- Negotiate for the Interest Rates
- Try to Make Prepayment of the Loan
- Try to Pay More Down Payments
- Check the Credit Rating
Do Proper Research –
A proper research before finalizing the home loan will save your lot of money. Before taking a home loan do a proper research. Which finance companies are offering lower home loan interest rate? Who are offering the extra benefits? Who are not charging for the prepayment of the loan? What are the floating rate and the fixed rate? Find out the processing fees of the financial companies. Find out what is the current interest rate. Is there any penalty or any charges for switching the loan to another financial company?
Negotiate for the Interest Rates –
The financial company’s sales person or executive might lessen the interest rate as they also have a monthly target and they don’t want to lose the customer. Negotiating interest rate will save your lot of money on the interest rate. If the banks have increased the interest rate you can increase the EMI amount instead of increasing the tenure of loan.
Better stay on increased EMI amount. By extending the tenure of loan you will be almighty paying more interest and more money. Bank may lower your interest rate when the home loan interest rate is decreased in market this will lower your EMI and increase your loan tenure.
Try to Make Prepayment of the Loan –
In the beginning stage of home loan the interest rate is higher so try to make prepayment in early years of the home loan. If you are getting yearly increment try to set the increased percentage of the salary towards the prepayment of the loan.
Every year try to keep aside some money for the prepayment of the loan. This way you will save the interest and the duration of the home loan. Most of the finance companies have removed the prepayment penalty so make the prepayment as much as possible.
Try to Pay More Down Payments –
If you pay more down payments the loan amount will be less and you will be paying lesser home loan interest rates and there will be less tenure of loan. While taking bank loan most of the finance companies have the condition of paying 20% of the property amount as the down payment.
Check the Credit Rating –
A better credit rating will approve your home loan with lower interest rate. So before applying for a Home Loan approve your credit score. Credit score can be improved by paying off the old dues, clearing the credit history etc. Before lending you the loan the financial companies check the credit rating of the borrower. Read the loan agreement carefully otherwise you might land up in problem in future.
You can also increase your loan eligibility by taking a joint loan in name of your spouse if spouse is also working or earning money.
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