With the rising inflation costs and better economic conditions, the RBI has started reducing the home loan interest rates. This downtrend in the interest rates will positively impact the borrower segment. Top banks and housing finance companies have significantly reduced the interest rates on home loans, thereby lowering the overall interest rate burden and make an easy loan repayment. A reduction in the interest rate will positively impact the borrower whereas; a hike in the same would result in higher loan rates so it would drop the count of the number of applicants every year.
An applicant will try every mean to avail loan at a lower interest rate, and there are certain factors associated to reduce the rate. This would be your income source, age, age of the property & its value, job or business stability, organization, existing financial status, and credit score. In this article, we would be discussing 4 crucial factors that will help you reduce your home loan interest rates. A change in interest rate will impact your home loan repayments, so let’s consider these 4 tips to curb your interest rates.
Factors that would affect your home loan interest rates
Income Source & Financial status:
This would be the first factor on the list of every lender. Naturally, they would be looking for an applicant who would have a stable income source and a good financial background. Lesser debt would mean comfortable loan repayment. Also, you should maintain a healthier bank statement to prove the affordability of your loan. Working in a reputed and listed organization will help you fetch some discount on your interest rates
It is the next thing on the watch list for the lenders. Credit history is one of the most important facto to determine the interest rate of the borrower. The higher your CIBIL score, the lesser would be your interest rate. A CIBIL score of around 750+ will help you negotiate with the lenders for low home loan interest rates deal. It signifies you as a responsible borrower who would make their repayments on time. Thus, a good credit history would mean lenders, are willing to welcome your application and improve your chances of loan approval as well.
Good Negotiation Skills:
If you hold a good relationship with a particular bank or NBFC along with good credit history, it puts you in a strong position to negotiate with the lender for a better interest rate deal. When you have a regular and stable source of income and if you apply at a younger age, the financial institution might offer loan at highly competitive interest rates, which will help you save a good deal of money for you.
Home loan Refinance:
This should probably be the last thing on your lists to reduce the home loan interest rates. If your existing bank or financial institute is not offering you an attractive deal, you can consider refinancing your home loan. Borrowers can make a smart move and compare the home loan interest rates
between various other lenders. Talk to your existing lenders to reduce the rate and if they’re not willing to you can plan to migrate to other loan lenders.
With these simple steps, customers can save thousands of rupees as well as reduce the overall interest rate burden.