Home loan: If you are paying more interest on home loan, then how to reduce EMI burden?  Understand the complete calculation

Home loan: If you are paying more interest on home loan, then how to reduce EMI burden? Understand the complete calculation

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new Delhi. Many banks have changed the interest rates of home loans. Rates have also been reduced on balance transfer. If you are also paying more interest on the home, then by opting for the balance transfer facility, you can reduce the EMI burden.

Actually, if your bank is charging more interest on the home loan, then you have the option of choosing another bank. In this situation, you can get your home loan transferred. Experts say that by choosing this option, you can not only reduce the EMI burden but also increase the repayment period.

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Top-up facility also
Investment advisor Sweety Manoj Jain explains that under this one can take top-up, which usually has no restrictions on its use. Loan restructuring facility is available in home loan transfer. This means that you can get the repayment tenure and EMI more or less depending on your repayment capacity.

Documents required for the facility
If you want to transfer home loan balance, then for this KYC documents like identity proof and address proof will be required. Apart from this, those doing their own business will have to provide financial statements for the last two years of their business and business continuity documents for five years. It is necessary for salaried applicants to provide current salary slip and six months bank account statement.

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Understand the calculation of savings like this
Suppose, you have an outstanding home loan of Rs 12.5 lakh, with a repayment tenure of 20 years. The current bank is charging you interest at the rate of 6.70 percent. Accordingly, your EMI liability becomes Rs 9,467 every month. In such a situation, any other bank gives you the facility of home loan balance transfer at the rate of 6.45 percent. If you choose this option, your EMI liability will come down to Rs 9,283 every month. In this way, you can save Rs 44,286 on the entire home loan.

If it is cheaper by 0.50 percent, then choose the option
Sweety Manoj Jain says that the new home loan is 0.25-0.50 percent cheaper than your current rate, only then opt for home loan balance transfer. In addition, most of the banks have gone digital. All banks and financial institutions give the option of online application to the customers. In such a situation, applicants must also take other information including top-up amount, flexible repayment period, foreclosure fee before transfer.

Tags: bank rates, Home loan EMI

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