Top 5 reasons for drop in 2014 Home Loan EMI

Home Loan EMI

Home is the most precious and expensive asset that we make during our life. With the increasing range of homes in terms of cost, it is really very difficult for the people to get their dream home. And what else you get? A heavy and thrifty burden of EMI’s will make it even more expensive. But, one can manage the drop in Home loan EMI with the few reasons associated with the drop in Home loan EMI’s in 2014. Banks are now more customer centric and have given few options for customers to lower their EMI’s. Let’s discuss the top 5 reasons for drop in 2014 Home loan EMI.

Reasons for drop in 2014 Home loan EMI’s:

1.     Tenure Stretched to 30 years: Recently RBI has announced that there will be an increase in the tenure of Home loan for its repayment. Earlier the Loan repayment tenure was fixed at 20 years but now it has been stretched to 30 years. Because of this, the EMI will be distributed for 30 years and the Home loan EMI will get lower. So, the individuals who do not have much repayment capacity in their pockets can opt for 30 years loan tenure to reduce their burden of heavy EMI’s.

2.     Lowering of Interest rates: Recently many banks have reduced interest rates for their home loans like SBI has made it @10.15% for men and 10.10% for women. Lowering interest rates means that EMI will get reduced as most of your EMI in the initial years comprises of interest amount. Thus, due to lowering of interest rates, Home loan EMI gets reduced.

3.     Balance Transfer option available: Many banks has this option available with them. Balance transfer option means that if some other bank is offering comparatively lower interest rates on their home loan, the person can transfer his/her balance amount of loan to the other bank who is offering lower interest rate, in order to make his/her monthly EMI’s lesser. This can be done by using Home loan EMI calculator where you can calculate the difference or benefit you’ll get in your EMI’s, if you choose for balance transfer in other bank.

4.     Lump sum prepayment option available: Some banks have the option of Lump sum prepayment when you have good amount of cash in your hand. In this option you can prepay lump sum amount towards home loan and continue your home loan with the balance amount for the same tenure. This will reduce the balance amount left for payment and hence, will decrease your amount of monthly EMI’s.

5.     Floating Rate of Interest: This option is pretty much interesting. There are two types of interest rates that you can opt for. One is fixed interest rates which remains same throughout your loan tenure and the other one is floating interest rates which changes with change in the base rate announced by RBI from time to time. Going for a floating interest rate can give you a pleasure of less EMI, if the base rate is reduced by the RBI. Thus, you can get a chance of enjoying lower EMI’s.

Therefore, these are the top 5 reasons or options available with the customers in order to reduce the burden of heavy and high EMI’s. It is our pocket and no one else knows how deep or shallow it is. So, get your EMI’s adjusted at par with your repayment capacity every month. You can do so by using Home loan EMI calculator, which will give you a clear range of your EMI’s on the basis of the amount you are in need of, interest rate and loan tenure.

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