How to get a Lower Interest Rate on Home Loan

Sometimes, high interest rates on home loans create a sleepless nights to many home buyers, but it is the time to de-stress where the market is volatile and the interest rates are coming down. However; Installments to be paid on big fixed deposit is still the same over five years. Nevertheless, numerous banks in India are lowering the interest rates on home loans and offering an option to change the account to another bank which is offering lower rates on home loans. Here are the few ways to approach banks for refinancing your home loan at lower rates.  

Don’t default your monthly payments on an existing home loan:

For knocking the other lender’s door for refinancing your home loan you need a high CIBIL score as it plays a major role. The crucial point is that the banks do not enjoy defaulters. Defaulting one monthly payment will lowers the CIBIL score. Once you have decided to refinance of your existing home loan make sure that your repayment history is clear. Keep in mind that credit card history is impeccable.  

Approach the bank at right times to lower your EMI’s

If your fixed interest rate is lower than the market rate then, one should discern that it’s not the right time to approach. You should approach the bank when the interest rates are lower than what you are paying. The best time to approach the bank would be during loan melas, festival seasons and expos as the interest rates are flexible at that time. If you are paying a floating interest rates then the payment you have to pay will be more or less than the current market price.

Make your papers ready and up to date

For refinancing a home loan you need all kinds of paper works which you have obtained at the time of obtaining a new home loan, including the tax payment receipts, current account details as well as other bank details of other loans. The paperwork which you are going to submit should be up to date. If you can afford, take a financial advisor help to go through paperwork.

Request your bank until you attain lower interest rates: In some cases, when you ask for lower interest rates the banks will turn you down.  Don’t be disappointed, keep in mind that bargaining is the marketing strategy to bank finances. Be active and update regarding home loan interest rates. Go through bank promotions and emails to find up to date data.

Switch loans within the same bank: Most banks will not be ready to lose the customers, so they will offer a switch option. To switch higher interest rates to lower rates the banks will charge a small fee with other miscellaneous expenses and processing fee. If you are not ready to lose hard earned money, wait for the next property expo, which offers concessions in processing fee and rate of interest. Keep in mind that switching with the same bank.

Approach private lenders: Firstly, approach a private bank for obtaining a home loan as it offers faster disbursement for your home loan but their rates will be bit higher. Stay with the private banks for 6 to 12 months and then switch to public banks which offer lower interest rates. Approach new players in the market like YES bank, L & T and many others as it offers better offers than older banks.