Few things to consider reducing your house loan interest rates.

Nothing compares to the joy and happiness you get when months of patience leads to finalizing your dream home in your city. However, not everyone can afford to deal fully in cash while buying home. Due to prior responsibilities, growing inflation and high costs property it becomes difficult to pay entire cash to buy your home. Naturally, you’ll search for some finances but traditional finance could prove a big blow to your pockets because of extremely high-interest rates and hardly any time for repayment. Therefore, the ideal way to finance your dream home would be taking a home loan on it. But, when you apply for a housing loan, the final choice is mostly based on interest rates.

The current house loan interest rates available in the market have seen a steep reduction, and with schemes like Pradhan Mantri Awas Yojana, it has become more viable for a common man to crack an affordable interest rate deal. You might feel like you managed to dig gold with rates you have received from lenders, but here are few things that you can watch out to reduce your house loan interest rates further:

Take shorter duration:

Although shorter duration would increase your monthly installment, it will ensure that your principal amount gets repaid earlier. Since the interest rate is applied to the principal rates, it's important you do repayment as early as possible. So once the bank or finance companies recover the principal amount, the absolute interest payout will decrease marginally.

Set monthly installment targets

Your loan is just another important responsibility of your life. So, make it a goal to pay an extra monthly installment every year. It will help to get to the finish line much before you have expected. When you get bonuses or any policy maturity benefits don’t splurge it on parties and hi-tech accessories. Instead, try to make as much payment as possible towards your loan. It will also incur low house loan interest on the remaining principal amount. It will help you get the finish line easily and much before than expected.

Don’t hesitate to re-finance

Many people fear refinancing might incur additional costs and would distract the repayment schedule. However, it’s not as such. At any point of time, you feel you’re being duped with high house loan interest you can approach other banks and finance companies for balance transfer for lower rates. You can think about switching to the other lender. There are leading finance companies who give re-finance rates of mere 8.40 to 9.40 % and if you’re a women candidate you can enjoy a special concession of around 0.5% of the loan amount. Even a 0.5% reduction can make a vast difference and save your lakhs of rupees.

So, don’t hesitate to take the plunge, do check the legal fee and the prepayment penalty as well. It would be wise to do a cost analysis for higher savings with low-interest rates.

Though, every borrower tries to get lowest possible house loan interest make sure the option you settle for fits comfortably with your monthly finances. While your aim should be making repayments at the earliest, don’t set an EMI that extremely high and you later might face trouble in paying the money. Missing payments can lead to bad credit score.