Here’s how to play smart with home loan interest rates.

Most people think of interest rates as a pain in the neck at the end of every month. For some it makes the entire repayment process a tedious and straining one. But there are many ways to play smart and ensure this cost always plays to your advantage. This article will help you with a few ways to plan for this expense, lower it and save money with it, read on to find out more.

Work on your credit score.
A good credit score gets you quicker approvals and you probably already know this by now. But did you know that credit scores also allow you to negotiate your interest rates too? Yes, if you start working on credit score by making timely credit card bill payments, not exceeding the credit card limit and by making all other debt repayment on time, you can leverage a good credit score in order to get lowered interest rates. The difference might only be a decimal point here or there, but even that can help you save loads of money in the long run.

Save for a bigger down payment.
It’s not alwayshome loan interest rates that are a problem. If your loan amount is large, the interest payable will also be more. If you save more and borrow less, the interest will be calculated on a smaller loan amount and hence you will end up paying much lesser in terms of interest.

The next tip is to always use an EMI calculator.
When you know what you’re up against, creating strategies to come out on the winning side is much easier. If you use an EMI calculator before the repayment schedule starts, you will know just home interest rate you have to pay and hence you can properly budget your expenses to accommodate this cost. This is because an EMI calculator will tell you how much EMI you have to pay each month for the entire tenure of your loan. This knowledge will help you plan you repayment process smartly.

Always keep balance transfers on your mind.
If your interest rates are too high and you want to lower them, then balance transfers are a great option. Many lenders offer lowered home loan interest rates to customer willing to switch lenders and transfer the balance loan amount to them. Most people will say there are too many charges involved to switch, but these charges will mostly be much lesser in comparison to the savings you get from home loan balance transfers.

Use home loan interest rates to save on taxes.
You can use the interest you pay to save on taxes. Under section 24 on the Indian Income Tax Act, you can avail tax deductions up to Rs. 2, 50,000 every year against the interest you pay towards your home loan. This way it’s an expense that helps you save just as much as you pay.

A combination of beforehand preparation, planning and tax savings will help you save loads of money with your home loan interest rates.

How save money with your home loans interest rates.

Most people think their interest rate is robust number. They think what the lender gives them in term of an interest rate is what they have to pay. But there are few ways to save money with your interest rate and this article will discuss some ways to save money & make the most of your interest rate.

Work on your credit score.
Some lender might tell you that you have a poor credit and attach a poor interest rate to your home loan. However, if you work on your credit score by making timely payments toward things like your credit card bill and your loans, your credit score will improve. You can then use this as leverage to obtain a lower interest rate. Even .25% here or there can help you save a good amount of money.

Compare.
Some people go with the first lender they come across. It’s often a lender they trust or heard about or a lender their parents trusted, but this is not the ideal way to go about thing. Rather, it’s advisable to compare the interest rates from many lenders before fixing on a particular lender.

Make higher down payments.
If it’s within your financial reach to make higher down payments then doing so will reduce the loan amount. Since the interest amount is calculated on the loan amount, this will help you save a lot on the total interest you will have to pay.

Choose floating rate of interest.
Floating home loans interest rates start of lower than fixed interest rates. So in the initial years, you can save big. Then even if the rates go up, they might not go over the fixed rate, which means you still save. If the rates go over the fixed rate, it won’t be for the entire tenure.

Switch to another lender.
If you find another lender that is providing lower interest rates, simply shift your loan to that lender. So it’s good to look out for offers on home loans even after you’ve taken a home loan from a particular lender. You might find that even after paying processing fee and loan transfer fee, the lowered interest rate can help you save a good amount of money.

Negotiate.
The interest rate handed to you isn’t something that you can’t negotiate. The lender puts a margin on the base rate that’s stipulated by law. Chances are if you try hard enough, your lender will give in and reduce your home loans interest rates by 0.10 or 0.20 percent.

Use your home loan interest rate to save taxes.
After all these measures, your interest rate will probably at the lowest it can get. But that doesn’t mean you can save any more. Under Section 24 of the Income Tax Act you can avail deductions against the interest paid towards a home loan. This deduction is subject to a maximum limit of Rs. 2 Lakhs

So not only can you reduce your home loans interest rates, you can also negate its cost to your income by using it avail tax benefits. Keep these points in mind when you apply for a home loan, they will ensure you save a lot of money!