Every individual dream of owning a house one day. But, let’s all agree that buying a house is an expensive affair. And even when you opt for a house loan, there is a huge price you have to pay, in terms of interest. A house loan generally lasts for more than 20 years, which means that the borrower is in debt for more than two decades. Since a house loan is a long-term loan and can bring big changes in someone’s life, one must do proper research and keep their future expenses and affordability in mind before filling out that application form. Once you understand all the expenses and have made a monthly budget for yourself that you are comfortable with, then only you should go ahead.

You will also have to accept the fact that now a fixed proportion of your income will go towards equated monthly installments or EMIs. If you are not sure about how much EMI would cost you every month, you can use an EMI calculator to find out. It is easily available online and is very simple to use. All you have to do is enter a few details, like your loan amount, interest rate, and tenure. The best part about the online EMI calculator is that you can use it an unlimited number of times.

Ways to bring down your house loan EMI

Choose a shorter tenure, if it is possible

As you will notice while using the EMI calculator also, tenure plays an important part in deciding your EMI amount and total interest payable. While tenures like 25 to 30 years will help you lower your monthly installment amount, shorter tenures like 10 to 15 years will reduce the overall interest on your home loan. By using an EMI calculator, you can easily get to know how tenure will make your EMIs go up and down. So, before selecting the tenure, make sure that you go for a shorter tenure if it is possible for you. This will help you save a lot of interest.

Go for prepayment

Banks do not charge prepayment or foreclosure charges on home loans taken on a floating rate. So, if it is possible for you, try to make prepayments whenever you can. By doing so, you can bring down the principal amount by a large percentage and subsequently reduce the total interest amount. However, in case you have taken your home loan at a fixed rate of interest, you might have to give an extra charge for prepayments. This will be a certain percentage of your prepayment amount. It is advised that you check with your bank or lender beforehand.

Choose the best rate of interest

Just like tenure, the rate of interest also plays a major role in deciding your EMI amount. More the interest, the more will be your EMIs. Please make sure that you do your proper research and find out what different banks or lenders are offering. Once you are done, you can go for the bank that is offering the best. For your ease, you can use the EMI calculator to find out the difference each offering will make.

Home loan balance transfer

This is one of the best options if you want to bring down your EMIs. A home loan balance transfer can be opted when you find a bank or lender that is charging a lesser rate of interest than your current lender. Make a note that any missed EMI on your transfer-based loans can cost you big penalties too. So, choose this option only when you do not have any other resort.

Increase the amount of your down payment

In most cases, lenders offer to finance 75% to 90% of the property’s value. The other 10% to 25% has to be paid by the borrower. But if it is financially possible for anyone to pay more from their pocket, they should do that. They should increase the down payment, which will reduce the total interest that you have to pay.

Look for deals

Different banks offer different deals at different points in time. It is always better to check all your options and make the best choice. Additionally, there are festive and seasonal offers as well. Keep an eye on them and then hit the rod when it’s hot. People with a good credit score of 800 or more also have higher chances of getting great deals on the home loan.