Buying a home is a big decision. This includes checking all your home documents and also its appreciation worth. If you plan to purchase flats in Chennai on home loan, you need to be very clear as to what the Interest rate on your home loan will turn out to be. This is when you should also know how to reduce that interest rate and make sure you are paying your easy monthly installments for apartments in Chennai in a smart and calculated way, so let's get started.
1. Make your home loan duration short
When you buy your first home, it is a great feeling. Purchasing even a 1 BHK in Chennai needs a huge amount of money and might require financing. Interest rate in India ranges between 7-8 percent. In such cases, to reduce your interest burden it is a smart move to make your home loan duration short. This reduces the interest amount and in turn your EMI value as well.
2. Pay additional EMIS
There are two ways to go about this. Either you can plan to pay extra EMIs to reduce the interest burden or you can pay extra amount with your EMI, to reduce your principal amount. This can also reduce your interest in turn. This can help you clear your home loan on your 1 or 2 BHK in Chennai earlier than you expected.
3. Getting home loan refinanced
Every bank has different rules and regulations. Some banks have higher interest rates and less documentation while others have less interest rates but more documentation. At the start in order to get the home loan for your own apartments in Chennai, you can choose the easy way out and buy it with higher interest rates. However, later on it is advisable to shift to a better bank and get your home refinanced for a lower interest rate.
4. Pick floating interest rates
When you buy flats in Chennai or elsewhere you have two options when it comes to Interest rates. You can either choose fixed interest rate or floating interest rates. This completely depends on your preference. However, it is advisable to pick floating interest rates. This is because in case the RBI rules change and the interest rate reduces you will not be able to take advantage of that with fixed interest rates. On the other hand, floating interest rates easily gives you that added advantage.
5. Annual extra payments
You can also make surplus annual payments such that your interest rate is reduced on your 1 BHK in Chennai.
These are the various ways in which you can reduce your interest burden while purchasing 1 or 2 BHK in Chennai.