Simple Ways to Reduce Home Loan EMI Burden

While the Reserve Bank of India (RBI) has relaxed the loan-to-value (LTV) ratios till March 2023, making home loans cheaper, they are not as cost-effective as one would imagine. EMIs or equated monthly investments are the most integral part of any loan. And unfortunately, getting a desirable EMI is not an easy task either. The amount that you have to pay can become burdensome for many borrowers.

However, what if there is a way to reduce that EMI burden? What if you, with some simple tips, can reduce the EMI burden and make room in your monthly budget for other expenses? Well, there are some easy ways you can do that. Continue reading to understand how.

Six Simple Ways to Reduce the Burden of Home Loan EMI

Choose Higher Down Payment

Down payment is the amount of money a borrower pays upfront when purchasing a home or any item for that matter. A general rule of thumb is that the higher the down payment, the lower will be the interest rate. The interest rate is calculated on the principal amount you borrowed from the bank. That means the higher the loan amount, the more money you will have to pay as interest and EMIs.

Choose Longer Repayment Period

While the loan repayment tenure is inversely proportional to the EMI amount, the total loan amount is distributed over a longer period. As a result, the monthly repayable amount is reduced as monthly instalments. However, note that choosing the longer terms will also mean you will be charged a rate of interest on the outstanding debt for an extended duration.

Apply for Balance Transfer

Another way to reduce the EMI burden is to opt for a balance transfer. While the interest rate is never the same with all lenders, it also changes depending upon different factors, as some lenders may offer a lower ROI. If some other bank or NBFC offers you a lower ROI, you can always choose the balance transfer option.

Look for Step-down EMI

Step-down EMI is typically valid for people who are close to their retirement. In step-down EMI, which would sound contrary to the heading, you go for higher EMI at the beginning of your loan. It helps you repay a substantial loan initially, and the EMI decreases as the outstanding amount does. One way to do this is to take advantage of the home loan EMI calculator.

Renegotiate ROI

When an individual has a good standing with their bank, they may be in a position to negotiate with the bank to reduce home loan interest. Banks will also positively approach their existing customers to increase brand loyalty and attract more customers.

Ask for Loan Restructuring

Many people have been impacted by the pandemic, facing financial woes. As a result, RBI has made a provision for restructuring the loans. All you need to do is contact your lender and ask them to restructure the loan. Banks or NBFCs will waive off your EMIs for a while and extend the tenure accordingly.

Final Thought

Home loans will remain an essential part of the home buying process. While it may seem burdensome, the above-mentioned pointers can help you ease the financial crunch. One way to mitigate the hassle of applying for a home loan is via a loan aggregator platform like KuberX.

KuberX by Aurum PropTech is a tech-driven platform that allows individuals to conveniently apply for home loans, LAP, balance transfers, and home loan top-ups. All you have to do is register on the platform, fill in the application and loan requirements, compare loans offered by different lenders, and choose the one that suits your needs. Our proprietary AI tools would present customised home loan options, enabling you to apply for a home loan in a hassle-free manner. It’s that easy!