A home loan is a financial instrument that assists many to buy their dream home. Home loan is provided by all HFCs and banks like Citibank home loan at pocket-friendly Citibank home loan interest rate or lower home loan interest rate by other home loan lenders. However, home loans come with the highest loan repayment tenure going up to 30 years and hence require a long term financial commitment from the home loan borrower’s end.
While the Citibank home loan interest rate and other lenders’ home loan interest rate is affordable, opting for the home loan for longer repayment tenure can considerably drain most of your money. Thus, it is recommended to prepay your Citibank home loan or home loan with other lenders as and when you avail surplus funds. The next option that can allow you to save money on your home loan is by opting for the low rate of interest home loan. Here, in this article, we will explain how one can lower their Citibank home loan EMI burden or other lenders’ home loan EMI burden both before and after availing of the home loan.
How can one considerably save on their Citibank home loan interest rate or other lender home loan interest rate before applying for the loan?
The home loan interest rate differs from one lender to another. And to avail, the best interest rate on your home loan, ensure to conduct a comparative analysis and in-depth research. Note that it can be performed online by visiting the financial portal of distinct financial institutions like HFCs and banks. You can even approach financial lending marketplaces to strike comparisons about the offering by different financial institutions in a single place. Note that availing of a home loan is one of the biggest decisions and thus must not be availed without thorough research. Visiting online financial marketplaces for comparison even helps you avoid multiple direct enquiries with different lenders within a short span of time.
Doing so makes each and every home loan lender fetch your credit report from the credit bureaus to know about your creditworthiness. And each enquiry gets reflected on your credit report, which in turn lowers your credit score. As credit score is one of the crucial parameters checked by lenders when evaluating your home loan, a lower credit score may reduce your chances to get your home loan approved. Instead, visiting online financial marketplaces to conveniently compare and select the suitable lender as per your financial need and eligibility helps to get a suitable home loan lender without negatively affecting your credit score as credit reports availed by online financial markets are looked upon as soft enquiries, which do not impact your credit score in any way.
Include in a co-applicant to your home loan application
For those prepaying to apply for a home loan, including in a co-applicant to your home loan application can lower your Citibank home loan interest rate or interest rate charged by other home loan lenders. When calculated for the whole repayment tenure, opting for a lower interest rate on a home loan helps you to lower your overall borrowing cost. Usually, the home loan interest rate may get reduced by about 0.50 % by including a co-applicant to your home loan. Adding a co-applicant to your home loan even enhances your eligibility for a home loan and also assists you to avail of some additional loan amount.
Keep a good credit score, i.e. your credit score by 750 and above.
The credit score of every home loan applicant is considered to be a crucial factor that is looked upon by home loan lenders. Having a good credit score not just enhances your home loan eligibility because you are looked upon as creditworthy by lenders, but they also offer you lower home loan interest rates. However, those with lower credit scores of less than 750 hold lower home loan approval chances. Thus, it is very crucial to review your credit score before submitting an application for a home loan. In case your credit score is low, ensure to take up crucial measures to ameliorate your score and apply for a home loan with a better score to avail lower interest rate.
How can one save on their home loan interest outgo after availing of a home loan?
Opt for the balance transfer option
The home loan balance transfer option is also called the home loan refinance option. It is a good medium to lower your home loan interest burden. But it can just be availed on the ongoing home loan. It means in case you are already serving a home loan, then only you can take up the balance transfer facility. However, to take up this facility, you should hold a good loan repayment history and should serve the home loan for over 2 to 5 years. The time you avail of this facility, your home loan, which is ongoing, gets closed with the lender, and all your outstanding home loan amount gets transferred to the new home loan lender. The home loan balance transfer option is usually done to lower the home loan interest rate or to avail better terms and conditions on a home loan.
Opt for pre-payment/part pre-payment with surplus funds whenever possible
Well, opting for the pre-payment or part pre-payment option does not help to lower your interest rate on home loans but also saves a great deal of money that goes towards interest. Thus, whenever you avail some savings, incentives or bonuses on your way, use them to prepay your home loan. Opting for this lowers your principal amount and saves you a lot of money, which you otherwise would have paid as interest. Basically, whenever you opt for the part pre-payment route, you avail 2 options, firstly is to lower your loan repayment tenure, and the second is to lower your monthly outgo as EMI. Thus, you require opting for one option based on your need.