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Buying home loan requires a lot of research and insight as it involves huge amount of money for longer duration.

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Different Ways to Save on Your House Loan

Who knows it better than you that building a house has become a very expensive and tedious task in today’s scenario. We all opt for home loans when we plan to give a shape to our dream home. Home loans are available at fixed rate of interest for a fixed time and can be opted through any of the banks or financial institutions. There are a number of floating loan offers in the market as well. While you plan to take up a home loan, it is also important for you to figure out a plan by way of which you will write off the home loan with interest within the time frame and by facing zero or minimum financial crunch.
If you manage your home loan diligently you will be in a position to write it off within the stipulated time or before that without getting caught in the debt web. Following few ways may prove help you to save money and manage your house loans at a better rate. Take a look –
Great Ways to Save on Your Home Loan
  • A good way to save on home loan can be reducing your term. This would help you in reducing your interest costs.
  • While you plan to decrease your term of home loan and if you think you can manage to shell out more money each month than what actually gets accrued than there is no harm in writing it off early by paying of extra amount every month.
  • You can try out making extra additional payments with anything extra that you earn. The additional payments that you make pave way for decrease in interest and reduction of term of your loan.
  • If your home loan provides you with the facility of switching and saving you may keep switching to options like variable rate to fixed rate or vice-versa in order to save on money.
  • It is always advisable to explore all the options pertaining to home loans and their clauses and benefits before you actually decide to stick to a particular home loan provider. This will help you to strike the best deal for yourself.
  • Always be on the outlook of exploring various payment options that loan houses/banks offer before you settle down for your home loan provider. Analyze your repayment capabilities and accordingly choose your loan option.
  • Many home loan providers come with an option where you can fix a part or full amount of your loan. In this case even if the interest rates go up, the part that you have fixed would not be affected by this. Similarly variable rate has its own advantage. Check your need and analyze carefully while ticking the option on your application form.
  • Beware of misleading advertisements that may lure you temporarily but may prove as a pain in your neck once you get caught in them. You may end up paying more than you had ever imagined. So, before signing any document explore, ask questions till you are satisfied and if need be take professional help.
  • You may try consolidating your debts. This may bring in some additional cash in your kitty but make sure you do it wisely and not get caught in the debt web.
  • It is always a good idea to bargain for additional discounts. No bank wants to lose its potential clients. You may try making them believe that the competitor is offering you better rates. Who knows this negotiation may work well in your favor.
  • To err is human and banks are no exception. Make sure that you study and examine your statements and check for extra fees, interests or charges that may have been deducted from your account under the head of home loan but they actually don’t belong to you.
  • Loan Plans are frequently updated by banks and financial institutions in order to keep pace with the ever changing scenario. It is advisable that you keep reviewing your home loan time and again. Consult with your bank advisor and whenever you have some additional cash, or if they have any offer of lower interest after paying say ‘X’ amount and it suits you than you may try your hands on it.
  • You may try paying your home loan installments fortnightly. When you get down on calculating you will find that there are 26 fortnights in a year and while you repay on this basis you will be able to reduce the term of your loan by approximately 4.5 years.
  • It is advisable to make bulk payments as and when you have cash flowing in. This would surely help you in the long run.
  • Before you make your mind of opting for a home loan, save and build a deposit for yourself. There are loan providers who offer lower interest rates to those who own 20-30 percent of deposit.
  • Refinancing your loan can be one option that though helps you in fetching lower interest rates and monthly payments but is not an advisable option for everyone. It requires strategizing your total savings and total costs involved in refinancing in a way that leads to fruitful returns for you. 
While opting for a home loan needs a lot of caution, you need to diligently find out ways that may help you in saving on your home loan. Whatever is published in the advertisement may not be the final word. Negotiating, exploring and finding out the best deal will help you save on your home loan while you move ahead with shaping your dream palace.