Before May 2022, the RBI has kept the repo rate unchanged many times during the past couple of years or so.
But even if the RBI keeps the repo rate unchanged in some future MPC meetings and banks keep the rates the same, too, here are some clever ways to reduce your HDFC Home Loan EMI burden!
-For homeowners who already have a housing loan
Choose to transfer the balance of your house loan and ask your lender to extend the term of your loan.
By virtue of the fact that longer loan tenures result in lower EMI, extending the payback tenure can result in a lower overall EMI obligation. However, expanding the length of time you have to repay a loan through your current lender is considered loan restructuring, which has the potential to negatively affect both your credit score and your eligibility for future loans. Instead, as an existing borrower on a home loan, you should go for a home loan balance transfer at a somewhat lower interest rate and choose a longer loan tenure if you want to save money.
For example, your monthly principal and interest payment (EMI) would be close to Rs 41,822 if you had taken out a home loan for Rs 50 lakh five years ago at an interest rate of 8% per annum for a term of 20 years. At the moment, the amount of your home loan that is still owing would be close to 43.76 lakh rupees, and you still have 15 years left on your loan.
Now, if you want to transfer the rest of your house loan to another lender at a rate of seven percent per annum for the remaining loan term of fifteen years, your EMI will be reduced to Rs. 39,335. Your EMI would be reduced even further to Rs 30,391 if you opted for a lengthier loan period of 25 years rather than 15 years when you chose HLBT as your financing option.
On the other hand, because a longer loan term results in a higher overall interest expense, you should make an effort to prepay the mortgage if you have extra money available in the future.
When considering HLBT, it is important to keep in mind that such requests are viewed by the new lender as a brand new application for a home loan. As a result, the new lender may assess a variety of fees and charges during the processing of the loan, such as a processing fee, an administrative fee, and so on. Before selecting the option to transfer your balance, it is important to take into consideration the expenses that are associated with doing so. Proceed only if you will end up saving a significant amount of money on interest over the course of the entire balance transfer process. Also, you can use theHDFC Home Loan Status tool to be aware of your application’s status.
-In the case of first-time customers of HDFC Home Loan
Aim to make a larger down payment
A larger amount contributed toward the down payment results in a reduced requirement for the HDFC Home Loan, which in turn results in lower monthly instalments and interest costs. Because making a larger down payment reduces the risk for the lender, this also improves your chances of having your mortgage application approved. When you are trying to save up for a larger down payment, you should be sure not to touch your savings account for unexpected expenses or the portion of your savings that is intended for important financial goals. If you do so, you may end up having to take out more expensive loans in order to finance your life goals or meet your financial obligations. After applying for the loan, don’t forget to check HDFC Home Loan Status from the app or website so that you know whether it gets accepted or rejected.
Opt for a lengthier repayment tenure
Not only can selecting a longer repayment tenure for your house loan help you save money on your monthly instalment payments (EMI), but it will also improve your chances of being approved for the loan. You should, however, consider making prepayments whenever you have surplus funds in the future. This is because a longer loan duration will result in an increase in the overall interest loan cost. It is important to keep in mind while making prepayments that, owing to the guidelines of the RBI, floating-rate loans do not involve any prepayment penalties. On the other hand, fixed-rate loans may levy a prepayment fee of typically up to 2 percent. Make sure to use an online EMI calculator tool to determine the optimal length of your HDFC Home Loan based on your ability to make monthly payments, besides from time to time getting an HDFC Home Loan Status through the online tool or by contacting customer care.
Examine the various lending options offered by potential lenders
It is always a good idea, prior to making an application for a house loan, to evaluate the numerous prospective lenders on a variety of criteria, such as interest rate, processing fee, term, HDFC Home Loan amount, and so on, before deciding to go with any particular one. It is imperative that you compare these lenders in order to obtain the greatest deal according to your loan eligibility and financial needs. This is because these parameters differ from lender to lender on the basis of the credit risk assessment of their loan applicants.
For instance, a large number of lenders implement risk-based pricing, which means that they provide applicants for home loans with cheaper interest rates and other costs if the applicant has a higher credit score, often 750 or above. There are several financial institutions that base the interest rates they offer on the applicant’s employer profile or the job they have. Moreover, lots of lenders also offer the facility of checking HDFC Home Loan Status on their app and website so that customer remains aware of the status of their application.
