Top Steps to Decrease the EMI Amount for Your Home Loan


As per the RBI House Price Index, India’s real estate sector has seen a considerable rise in the prices of the housing sector. This inflation has also led to an increase in the average ticket-size of housing loans.
Since home loans can be the highest form of external financing an individual avails, its EMIs are also substantial. Borrowers must use an EMI calculator for a home loan to find out their monthly installments before applying for an advance to avoid financial strain.
This online tool also shows the loan amortization schedule. This schedule fully displays how the EMIs are broken up between principal and interest.
During the initial part of the tenor, the interest amount is higher and the principal lower. As the tenor progresses, the interest lowers and the principal increases in EMIs.
The monthly installments are calculated with the home loan EMI calculator based on several factors such as tenor, interest rate and the principal sum.
If borrowers find it hard to manage their EMIs, they can refer to the following tips to reduce the same  
Part-prepayment– When a borrower pays off a part of his/her home loan balance in parts, the outstanding amount that they owe to a financial institution reduces.
Known as part-prepayment, it either reduces the EMIs while keeping the tenor the same or vice versa.
You can use a home loan part-prepayment calculator to check the impact of prepayment on your home loan.
Go through these following steps to use such a calculator –
Enter the loan amount, tenor and rate of interest.
Next, provide the amount that you wish to pay as prepayment.
After entering the above values, you will be able to see the EMI and tenor amount that you can save on making part pre-payment.

Balance transfer – This is a method of refinancing your home loan to pay lower home loan interest rates. This option is for those who are currently paying significant EMIs. They can opt for balance transfer of their loan to another lender, which is offering loan at a comparatively lower rate of interest, and pay a low EMI amount. Besides, there are other reasons why you should be choosing a balance transfer facility.
For instance, you can avail a Top-Up Loan when transferring to HFCs like Bajaj Housing Finance Limited.   

Extend the tenor – Borrowers can choose an extended repayment tenor according to their financial solvency. Longer tenor reduces the EMIs as the balance is spread over the longer-term. Accordingly, if your lender does not offer flexible tenor, you should opt for a balance transfer.
Make sure to use a home loan EMI calculator to evaluate your new monthly installments after extending the tenor.
However, it is not advisable to opt for a longer tenor. Because, though the EMI amount reduces, the total cost of loan increases.
These above-mentioned ways are the best ways to help you decrease your EMIs. Nevertheless, you can also negotiate with your lender to reduce the rate of interest and hence the monthly installments before applying for a home loan.
You can negotiate with your lender if you –
● Hold a high CIBIL score of 750 or above.
● Are applying with a creditworthy co-applicant.
● Make a substantial down payment.

Make sure to use an EMI calculator as there are several benefits of calculating EMIs before applying. Aside from that, ensure that you meet the required home loan eligibility criteria to increase your chances of approval.