Home Loan rates have fallen to a low of 6.7% as most of the Public Sector banks have passed repo rate cut to the customers. Four months ago, Reserve Bank of India had announced a reduction in the repo rate due to the current Covid-19 Pandemic.
Almost all Public Sector Banks have started giving loans on the 6.7% rate of interest. Home loans that are linked to repo rates have started getting lower interest rates now. But, Home loans that are linked to MCLR are paying higher interest rates. Tips on how to reduce your loan burden are:
The first and foremost thing is to switch to the banks that are offering homes loans on a lower rate of interest. Switching to the PSUs or the banks linked to the Repo rate will help you pay less interest on your loans and would be lighter on your pocket.
Doing Part Payments
Doing part payments help you reduce your loan burden faster. If you have any extra money or any bonus then pay in part payments. It might also help you in saving money as your interest amount burden gets low by making part payments.
Use Home loan Top Ups
You can take top-ups on your home loan to get any additional amount you require at a low rate of interest and it will help you in reducing your interest burden rather than taking a personal loan or any other loan. Interest rates on personal loans are always higher than home loans as they are unsecured loans and taking a top-up on home loan will only help you pay back less than what you took on the personal loan. You can also take a top-up to pay back your other loans.