How To Enjoy Reduced EMIs For A Mortgage Loan

Do you need money for your son’s overseas education or a grand wedding in the family?Is the need urgent such as medical expenses for your ailing parents?Wondering how to meet your financial contingencies?There’s a simple solution to your problems—a home mortgage loan.Many lenders now offer mortgage loans customised to the needs of salaried and self-employed individuals.But not all of us are experts in this field and often end up paying high equated monthly instalments (EMIs). Therefore, a little bit of knowledge is always beneficial when it comes to applying for aloan.There are ways to reduce the EMI amount for your mortgage loan. Read on to know more.

  1. Good credit score

Quite obviously,lenders prefer borrowers with a good credit history. But how do they differentiate between reliable and unreliable borrowers? They do this by looking at the borrower’s credit score. The credit score is a numerical summary of your credit history. It is a score based on the analysis of your past repayment history and financial stability. The score, which is provided by the Credit Information Bureau (CIBIL), varies between 300 and 900. Anything above 750 is considered a good credit score.A good credit score is indicative of your timely repayment capacity, better power of negotiation, a better interest rate and a lower EMI amount.

  1. Go for a higher down payment

Down payment is what you need to pay at the time of buying something on a loan. You pay the rest of the amount as EMIs over a fixed period of time. And this total unpaid amount is called the principal amount. So, if your down payment is high, the principal amount will automatically come down.

As your mortgage loan interest rates is calculated on the basis of the principal amount, a lower principal would mean a lower interest outgo. So, it will not only bring down the EMI amount but also helps you save a lot over the years.

However, this only applies if the mortgage loan you are going for is a home loan. If you go for a loan against property, down payment is not needed.

  1. Loans with longer repayment tenor

There is also the option to go for a longer repayment tenor to bring down the EMI amount. The EMI amount is inversely proportional to time. So, if you choose a longer tenor, the principal amount will be distributed equally over a longer period of time, resulting in a lower EMI amount. Keep in mind, though,the amount paid towards interest will also go up in this case. So, plan well before choosing a particular tenor.

  1. Negotiate for better rates

The old-school method of negotiating with the lender often leads to a lower EMI. Search around for better rates just as you search for a good home before going for a loan against property.

5.Compare available loan options

Suppose your existing lender is not offering a gooddeal.In this case, you can search around for the best deal. There is no dearth of good lending institutions in the market. These days, both banks and non-banking financial companies(NBFCs) like Bajaj Housing Finance offer loan against property up to Rs.3.5 crore.

Bajaj Finserv also brings you pre-approved offers for loan against property, personal loans, EMI finance, and more. This simplifies how you get financing and helps you save on time.

  1. Part repayment

Part repayment of the loan amount can reduce the burden of EMI. It also reduces the total interest paid towards the loan. If you’ve got a pay hike or a bonus, or have saved a good amount of money, it is advisable to make part payment of the loan. You can use an online mortgage loan calculator to get a clear view of the EMI amount after making the part repayment.

Summing up

Choose from the wide variety of available loan options. Many lenders even offer instant mortgage loan approval. Plan well before taking out a loan. Generally, we think of EMIs as a burden. But, as explained above, there are ways to bring down the EMI amount and thus reduce the financial burden.

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