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Here's How you Can Save Your Hard Earned Money on Your Home Loan!
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Home loans can help you fulfill your dream of buying a house. However, a home loan’s equated monthly instalment (EMI) is a substantial expense that can consume almost half of your earnings. Amidst this, if someone informs you that you can save your money on a housing loan, you could be surprised. But it’s true. There are ways through which you can save your hard-earned money with your loan repayment.
Read on to know about them.
You must research thoroughly before availing a home loan. You must research about various lenders and choose the one that offers a suitable home loan for you. Apart from the lender's interest rates, you should also consider their fees and charges. Many lenders offer low interest rates but have a high processing fee. Therefore, ensure that you do advance research and inquire about the lender's interest rates, charges, processing time, etc., to avoid unnecessary expenditures.
The best way to save money on a home loan is prepayment. With prepayment, you can get rid of your loan faster and save on interest costs. Pay a larger down payment while applying for a housing loan. Also, utilise your monetary gifts, bonus and interest income and returns towards part prepayment of your loan.
Before applying for a home loan, ensure that you meet all the lender’s eligibility criteria, have a stable job profile and high credit score. Lenders usually offer lower interest rates to borrowers with a good repayment capacity and creditworthiness. You can also ask for lower interest rates if you are an old and loyal customer. You can also get lower interest rates by availing a joint home loan. Moreover, you must negotiate with the lender while applying for a housing loan. Lenders often offer the lowest home loan interest rates if you can negotiate well and have high credit score.
Having a high credit score is necessary while servicing a home loan. While it is crucial for application approval, you also need a high credit score to transfer your housing loan. You must have a credit score of 700 and above to get a loan at low-interest rates and attractive features.
Transferring your loan is also an efficient way to save money. With the home loan balance transfer facility, you can transfer your outstanding loan with another lender who is offering lower interest rates. The new lender pays the outstanding principal amount to the existing lender, and you pay the remaining EMIs to the new lender. However, ensure to check the cost of switching loans, use a loan balance transfer EMI calculator, and transfer only when you can make some savings.
Doing advance research, channeling your income and loan prepayment can help you save money while servicing your home loan. Moreover, you can utilise returns from investments to pay the loan EMIs. So, what are you waiting for? Buy your dream house with Kotak home loan today.
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