How to Reduce Home Loan EMI Burden in 2024, Some Tips

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Posted By PAVZI
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Many people rely on home loans to build or buy their own house. However, some borrowers do not consider the interest rates when taking a loan, which can cause anxiety when paying the EMI. To avoid this, experts suggest ways to reduce the interest burden of home loans.

For middle-class families, building or buying a house is a significant dream that requires saving a large amount of income in advance. Home loans are often a necessary condition to achieve this dream. However, interest rates should not be ignored. As the RBI increases the repo rates, banks often increase their interest rates on all types of loans, including home loans.

To reduce the impact of rising EMIs, experts suggest opting for prepayments or investing any surplus funds in an opportunity that earns a higher return than the interest rate on the home loan. Partial prepayment owning a house is a significant dream for many people, and home loans are often a necessary condition to achieve it. However, when taking a home loan, borrowers should consider interest rates to avoid anxiety while paying the Equated Monthly Installments (EMIs). As the Reserve Bank of India (RBI) increases the repo rates, banks also increase their interest rates, including home loans. 

To reduce the impact of rising EMIs, experts suggest considering prepayments or investing any surplus funds in an opportunity that earns a higher return than the interest rate on the home loan. Partial prepayment can also reduce EMIs while keeping the loan tenure unchanged. Home loan overdraft facility is another option to prepare for the increase in interest rates. Depositing any extra funds in the overdraft account can help reduce the interest burden.

If there is a budget deficit or surplus funds, the loan tenure may be extended to keep the EMI payments at the previous level. However, it is important to note that extending the loan tenure means paying EMI and interest for more years. It is best to consider all options and choose the one that suits your financial situation. Many people rely on home loans to build or buy their own house. However, some borrowers do not consider the interest rates when taking a loan, which can cause anxiety when paying the EMI. To avoid this, experts suggest ways to reduce the interest burden of home loans.

For middle-class families, building or buying a house is a significant dream that requires saving a large amount of income in advance. Home loans are often a necessary condition to achieve this dream. However, interest rates should not be ignored. As the RBI increases the repo rates, banks often increase their interest rates on all types of loans, including home loans.

To reduce the impact of rising EMIs, experts suggest opting for prepayments or investing any surplus funds in an opportunity that earns a higher return than the interest rate on the home loan. Partial prepayment can also reduce EMIs and keep the loan tenure unchanged. Home loan overdraft facility is another option to prepare for the increase in interest rates. Depositing any extra funds in the overdraft account can help reduce the interest burden.

If there is a budget deficit or surplus funds, the loan tenure may be extended to keep the EMI payments at the previous level. However, it is important to note that extending the loan tenure means paying EMI and interest for more years. It is best to consider all options and choose the one that suits your financial situation.

PAVZI

Hi, I'm Pavzi. I have 15 Years of Experience in the Financial Industry; here, I have posted various Financial Updates and Money Matters with How-to Guides according to the Latest Fintech News updates.