Financial institutions generally provide mortgage loans at a lower interest rate since they are secured loans. However, while opting for these loans, paying EMIs can be problematic for an individual if he/she does not have a proper plan.
In addition, these interest rates may differ from one financial institution to another due to different terms and conditions. Thus, to make borrowing cost-effective, one should know how to lower the home mortgage loan interest rate.
Following are a few ways to reduce interest rates on mortgage loans:
Choose a shorter tenor
Selecting a short repayment tenor for a loan against property is a sensible option to lessen its interest rate. Furthermore, going for a short tenor also helps in lessening the total interest payable. However, borrowers need to be aware of their financial position before choosing a shorter tenor as they have to pay higher EMIs in this case.
Select a lower credit amount
Often, borrowers select a larger sum than the usual amount they need to meet their expenses. By doing so, the interest rate of the loan increases unnecessarily. This is why borrowers should opt for the exact amounts they need to get low home mortgage loan interest rates.
Make regular prepayments
Borrowers may considerably reduce their LAP interest rate by making loan prepayments timely. Also, if they earn a bonus, they can reserve it and use it for prepayments. It is undeniably one of the ideal strategies to reduce the interest rate on LAP.
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