Home loans are one of the best and the most efficient means with the help of which you can get closer to your dream of owning your home. With its many advantages, such as maintaining the capital growth and increasing loan eligibility to find a better way of saving, home loans are like a blessing for many who aspire to build or buy their own homes.
How to reduce the home loan interest rate?
If you are looking for the right means, which can result in home loan interest rate reduction, then you need to follow these points:
- Opt for long tenure home loans and begin with SIP
- Make more payments then your fixed EMI
- Always ensure that you are making regular part payments
- You can always choose the option of switching your home loan
Home loan tips
Whether you are buying a house for the first time or the second or the third, here is a list of factors that should always be kept in mind to know how you can reduce home loan debt.
Banks RLLR or EBR
This means that you should always look for a bank that has a low RLLR (Repo Rate Linked Lending Rate). A lower RLLR implies that you will have to pay a low rate of interest on your loan. Ensure that you are entirely aware of the bank's external benchmark rate and in sync with RBI's repo rate.
Comparison of the home loan rate
Different banks provide different interests on loans as per their profiles and designation. For example, the interest rate of a salaried person may differ from that of a businessman. If you are looking for the right means to reduce the home loan, then this procedure is sure to come to your rescue.
Paying the maximum amount of down payment
There is no rocket science in understanding the simple fact that if you have paid the bulk of the maximum amount of the property, there will be an automatic cut down on the interest rate for the loan you have taken.
The right strategy to pay the loan
The day your home loan starts, it is essential that you have a plan ready, or in other words, a source of income ready through which you can make all your monthly payments without any delay.
Housing loan tax exemption
There are several sections and acts under which a person can avail exemption and deduction on the purchase and construction of residential properties. Some fantastic acts that have been passed on by the government are those of:
- Section 80C: exemption of up to Rs 1.5 lakh on home loan principal repayment
- Section 80EEA: additional interest deduction of up to 1.5 lakhs under affordable housing for home loans sanctioned between 1st April 2019 and 31st march 2020
- Section 24B: exemption of up to Rs.2 lakhs on interest repaid during pre and post-construction period.
- Section 80C: exemption for stamp duty and registration charges.
There is no denying that home loans are a blessing not just for those who can't make the entire payment at one go but also for the many benefits it offers to the aspiring and new homeowners. Since these loans are highly beneficial, one must always opt to ensure for a smooth way to their paths of making their own homes. We hope this blog helped you understand how to lower the home loan interest rate.