Applying for a Loan manages the financial shortfall. However, it adds a responsibility to repay them on time. This becomes possible when you get a favourable interest rate from banks. In many cases, Loans attract higher interest rates based on your eligibility. Moreover, Home Loans have a long repayment period thanks to a high capital requirement. It takes almost 15 to 30 years to pay off Home Loans.

Paying off the Loan that involves such a long tenure can be challenging. Hence, reducing the Home Loan interest rates is the ideal way. It is possible to get an affordable deal when apply for the Loans. But if you have already for the Loan, there are still ways to reduce the burden. You need to make the right financial decisions and use appropriate strategies. Here are some measures to reduce the interest rates:

Make prepayments

The initial equated monthly instalments are towards interest rates. This means regular prepayments in the early years of the Loan significantly reduces the interest amount. Hence, use your bonus, variable pay, or additional income for prepayments. This is the ideal way to reduce the interest rates and repay the debt simultaneously. Moreover, banks do not apply any charges if you have a floating interest rate.

Leverage options

If you have a clear EMI payment record and a high credit score, you can get better interest rates. Make sure to compare different bank offers. While doing so, you come across various competitive offers. But they do not guarantee lower interest rates. So, go beyond the quotes and use the Home Loan calculator to estimate the cost accurately.

Opt for balance transfers

The other best way to negotiate with your current bank is to reduce the interest rate. But if this fails, you can always port your Loan to another bank. This is called a balance transfer. Here, you move your outstanding Loan amount to a new bank who provides better interest rates. However, you incur some costs for switching. So, check the same and do a cost-benefit analysis before transferring.

Change Loan tenures

Banks provide flexibility while determining the Loan tenure. This often makes borrowers opt for a lengthy duration to repay comfortably. However, this may be counterproductive in the long run. A longer tenure provides momentary relief and increases the interest rates significantly. Banks want borrowers who can pay off the Loan amount faster. Hence, they provide better Home Loan interest if the repayment tenure is shorter.

So, consider these measures and accordingly apply for Home Loans. Since it is a long commitment with the bank, ensure you find the best deal.