Home loan EMI can form a substantial part of your monthly financial outflow. Home loans are generally the bigger loans and the EMI can go on for years. Let us understand how the home loan EMI burden can be reduced.

Ways to Reduce Home Loan EMI Burden

  1. Make a higher down payment - Making a higher down payment reduces the loan amount, which in turn reduces the EMI amount. This will also help you in reducing the overall interest cost.
  2. Increase the loan tenure - Increasing the loan tenure reduces the EMI amount. However, this will also increase the overall interest cost. You should consider this option only if you are unable to pay the higher EMI.
  3. Make part prepayments - Making part prepayments towards your home loan reduces the outstanding principal amount, which in turn reduces the EMI amount. This also reduces the overall interest cost.
  4. Switch to a lower interest rate - If you are currently paying a high-interest rate on your home loan, you can consider switching to a lower interest rate. This can be done by negotiating with your existing lender or switching to another lender who offers a lower interest rate.
  5. Increase your EMI amount - If you have a higher income, you can consider increasing your EMI amount. This will help you in reducing the overall interest cost and the loan tenure.
  6. Refinance your home loan - Refinancing your home loan can help you in getting a lower interest rate and reduce your EMI amount. However, you should consider the refinancing costs and the overall benefits before making a decision.
  7. Maintain a high credit score – Having a high credit score can help get a lower interest rate on your home loan. Make sure you have a reasonable credit score when you apply for a home loan.

Conclusion

Home loan EMI can be reduced by switching your loan to a lower interest rate lender, making a down payment, maintaining a good credit score, increasing the loan tenure, making pre-payments, increasing the loan tenure, etc. Remember, before making any changes to your home loan EMI, you should consider the long-term financial impact and consult with a financial advisor if necessary.

Calculate Your Home Loan EMI  by using Home Loan EMI Calculator 

FAQ of How can I reduce my home loan EMI burden

1:Can I reduce my home loan EMI without increasing the loan tenure?

Yes, you can reduce your home loan EMI without increasing the loan tenure by making part prepayments towards your home loan. This reduces the outstanding principal amount, which in turn reduces the EMI amount.

2:Is it better to reduce the EMI or the loan tenure?

It depends on your financial situation and goals. If you want to reduce the overall interest cost and pay off the loan faster, you should consider reducing the loan tenure. If you want to reduce the immediate EMI burden, you should consider reducing the EMI.

3:How can I reduce my home loan EMI without increasing the loan tenure?

Apart from making part prepayments, you can also consider refinancing your home loan to get a lower interest rate or negotiate with your existing lender for a lower interest rate. You can also increase your EMI amount if you have a higher income.

4:How much part prepayment can I make towards my home loan?

There is no limit on the amount of part prepayment you can make towards your home loan. However, some lenders may charge a prepayment penalty if you prepay more than a certain amount.

5:Is it advisable to increase my EMI amount?

If you have a higher income and can afford to pay a higher EMI, increasing your EMI amount can help you in reducing the overall interest cost and the loan tenure.

6:Can I reduce my home loan EMI by switching to a lower interest rate?

Yes, you can reduce your home loan EMI by switching to a lower interest rate. You can negotiate with your existing lender for a lower interest rate or switch to another lender that offers a lower interest rate.