Reduce existing home loan interest rate, here we tell you how

If you are looking to buy your dream home, this can be a good time to invest in a property. Several banks in the country are offering the lowest ever home loan interest rates. Besides this, there are also festive offers in the form of processing fee waivers. 

To top it all, the Reserve Bank of India (RBI) recently decided to keep the key interest rates unchanged. This has come as a big respite for borrowers amid the ongoing COVID-19 pandemic. However, here we would like to tell you that if you have already taken a home loan and have been paying your EMIs, we will give you some useful tips to reduce your home loan interest rate.

Of late, banks are giving lucrative offers with the rate of interest on home loans.

How to reduce home loan interest rate

If you shift your loan to an EBR-linked loan from BPLR, base rate or MCLR loan then chances are there of interest rate coming down along with EMI.

When the interest rate drops, customers who have availed floating rate of home loan will invariably pay EMI at the reduced rate of interest. 

Floating rate home loan borrowers have great flexibility of making partial prepayment without any penalty which they can utilise to reduce their EMIs.

If you think your current lender has a higher interest regime, you can consider a home loan balance transfer depending on the new lender.

Remember to keep your CIBIL score high and your debt-to-income ratio low. This will help you get a minimum home loan interest rate.

If you are facing any sort of financial stress and want to get some relief by reducing your home loan EMI, then consider extending the tenure of your loan.

Due to the COVID-19 pandemic, if borrowers are finding it difficult to pay their EMIs temporarily they can opt for a moratorium from their lender.

A moratorium waives off EMIs or principal part for some time and restructures the loan to a suitable repayment regime thereafter.