Initially, RBI had offered a 6-month moratorium on EMIs starting from 1 March 2020 to 31 August 2020 to control the financial crisis. But, the situation didn’t improve much after that.
We have identified 6 simple ways that will help you reduce the burden.
1.Change your lender
You might have taken a loan at a higher interest rate before but try to find the lenders who can offer the equivalent amount at a significantly lower rate. If you fail to find a mid-loan lender, consider extending your repayment tenure. Use an online EMI calculator to check how lower your EMI can go and how will it help it.
Changing the lender is a not-so-difficult process. Approach the alternate lenders and get the balance transferred.
2.Make a bigger down-payment
The higher the down-payment is, the lesser the principal amount of loan is! It automatically reduces the payable interest and EMI amount. Use your extra savings to pay the significant amount of down payment and reduce your EMI stress in turn.
There was a time when prepayment of loans cost a lot more than expected. However, recently most banks and NBFCs have stopped taking pre-payment fees, allowing borrowers to speed up the repayment of loans.
4.Choose longer tenures
If no other option works, extending the loan repayment tenure will help. You might have to pay a higher amount as interest but the monthly EMI amount will reduce. Negotiate with your lender for extending the tenure.
Make sure to read the home loan eligibility criteria, repayment, refinancing, and prepayment terms imposed by your lender before closing the deal. Adequate research and planning will keep you safe in the long term.