{"id":319,"date":"2017-03-29T07:59:30","date_gmt":"2017-03-29T07:59:30","guid":{"rendered":"http:\/\/www.antworksmoney.com\/blog\/?p=319"},"modified":"2024-11-12T15:27:17","modified_gmt":"2024-11-12T09:57:17","slug":"reduce-interest-home-loan-emi","status":"publish","type":"post","link":"https:\/\/www.antworksmoney.com\/blog\/reduce-interest-home-loan-emi\/","title":{"rendered":"How to reduce Interest on your Home Loan EMI"},"content":{"rendered":"

EMIs eat a huge chunk of your take-home pay every month and it makes sense to try and reduce the amount you pay as EMI every month. Let\u2019s get the basics right! What exactly is an EMI? EMI means Equated Monthly Installments. It never varies and you pay this amount month after month during the entire duration of your tenure, until you have repaid your loan amount to the lender. This applies to all types of loans like home loan, personal loan<\/strong><\/a> and so on.<\/p>\n

How is EMI calculated and what does it consist of?<\/strong><\/h4>\n

Each EMI includes both the principal as well as the interest for the entire duration of the loan. In the initial years of the tenure, EMI includes a higher percentage of the interest. As years go by, the interest component reduces and a higher proportion of the EMI goes towards repaying the principal.<\/p>\n

Now, let\u2019s have a look at some ways to reduce your EMI burden:<\/p>\n

    \n
  1. \n
    Large Down Payment<\/em><\/strong><\/h5>\n<\/li>\n<\/ol>\n

    When getting a home loan, try to make a high down payment, so your principal gets reduced. Remember that the interest depends on the principal, so lower the principal lower is the interest and ultimately, lower EMIs. While practically it may be difficult to pay a huge down payment, it\u2019s certainly worth it in the long run. High down payments can lead to higher savings down the years. This is very true especially in the case of loans with a long tenure like home loans.<\/p>\n

      \n
    1. \n
      Negotiate with the Lender<\/em><\/strong><\/h5>\n<\/li>\n<\/ol>\n

      The interest for your home loan depends on a mix of plenty of factors like your repaying capacity, your CIBIL score, other loans you have availed, your salary, education, employment record and so on. If you have a good credit score and a history of timely repayment, then you\u2019re in a favorable position to negotiate with your lender. Your lender may consider this and offer you a reduction in your interest rate when you apply for a home loan. Even a small reduction could reduce your burden significantly.<\/p>\n

        \n
      1. \n
        Opt for Early Prepayment<\/em><\/strong><\/h5>\n<\/li>\n<\/ol>\n

        You can reduce your EMI<\/strong> significantly<\/a> by opting for an early advance, especially during the initial years of the loan tenure. This decreases your principal significantly for the remaining tenure, thereby reducing your EMIs, so you get low-interest home loans<\/strong>.<\/p>\n

          \n
        1. \n
          Try Switching over to another Lender<\/em><\/strong><\/h5>\n<\/li>\n<\/ol>\n

          If you can find another lender who offers you better rates, then don\u2019t hesitate to refinance your home loan. However, you have to ensure that the costs for switching don\u2019t exceed the savings you\u2019ll make with the transfer.<\/p>\n

            \n
          1. \n
            Finally, go in for a longer tenure<\/em><\/strong><\/h5>\n<\/li>\n<\/ol>\n

            If nothing else works, then you can opt for a longer loan tenure. When you choose a longer period, your EMI gets reduced significantly. However, the catch here is that while you pay smaller EMIs, you will end up paying interest for a longer time. So, try to balance it out.<\/p>\n

            Make use of these smart ways to reduce your home loan<\/strong> EMI<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

            EMIs eat a huge chunk of your take-home pay every month and it makes sense to try and reduce the amount you pay as EMI every month. Let\u2019s get the basics right! What exactly is an EMI? EMI means Equated Monthly Installments. It never varies and you pay this amount month after month during the … Continue reading “How to reduce Interest on your Home Loan EMI”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":320,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[47],"class_list":["post-319","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-loan","tag-home-loans"],"yoast_head":"\r\nHow to reduce Interest on your Home Loan EMI<\/title>\r\n<meta name=\"description\" content=\"Home Loan EMI means Equated Monthly Installments. 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