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Big Reduction in Home Loan Interest Rates- Rules to Follow

Big Reduction in Home Loan Interest Rates

Home Loan Interest RatesThe steep cut in the home loans lending rates has come as good news for new borrowers. As per the new guideline, many nationalized and regional and local banks have a great cut in their interest rates and it is going to bring your dream of owning home too close. The Huge inflow of deposits into the banks during recent times turns to be one big reason for the reduction of home loan rates. It is important for the banks to deploy this money profitably so, they have moved a step forward offer low interest rates on home loans.  With the advent of technology, banks are taking very less time to approve the loan if everything stands in a perfect place. Follow these golden rules and you never find yourself in debt.

Repayment Capacity

Though latest technology has made loan processing easy and quick, the canons of borrowing remain same. Borrow the money when you need it and can afford to repay it.  The mortgage loan

 You take from the bank should not be more than 50% of your net income. Your loan income ratio should always be in acceptable limits.

Short Tenure

Try to keep the mortgage loan tenure as low as possible to reduce the interest you pay towards the loan. Long loan tenures may tempt you with low EMIs but the amount you pay in the form of interest is very high.  If your income is low, long home loan tenure is a viable option, in such cases; you should choose to raise your EMI with the rise in your income levels.


 Repayment of the home finance should be your priority expense in the monthly budget. If you default your loan prioritizing other expenses, there are good chances the home loan lenders

Put your home under auction to deferment debts. You will be ultimately losing the possession of your dream home and stay in the bad books of the debtor. It turns to be impossible to fetch any other loan from the banker in future.

Switching home loan

Most of the times, home loan borrowers stick to a single bank. When you find home loan lenders

 that offers lower interest rate, there is nothing wrong in the home loan transfer, there are some key aspects one should remember while switching your home loan. You should analyze the cost and benefits you incur before you proceed ahead with the home loan transfer. Try to negotiate interest rates with the banker to enjoy better benefits with the switch. If you feel that your current scheme is offering good benefits, in the long run, it is advisable to stick to the same. You will be able to take a better decision on switching only when you have good analysis on your current savings and expenses and the amount of interest you pay towards the loan.

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