Development lands in Hyderabad are very valuable and securing home loans to purchase them is worth the effort. Since the land value in Hyderabad depends upon the quality of the land naturally the investment will be highly-priced.
Homes are assets that are worth investing and is a good investment option too. These investments are quite often funded via a home loan. The rate of interest that a person pays on a home loan happens to be an important determinant of one’s total cost of the house.
It must be known that land value in Hyderabad fetches a high price. It is fact that the higher the rate of interest, the more a person ends up paying towards the home.
While investing in development lands in Hyderabad it is important to pay attention to the interest payment mode as well.
How can the home loan interest rate be reduced?
Ensure a good credit score no lender on the market does not prefer a good borrower – a person who pays back the loan meeting up to satisfying all pre-determined terms as well as conditions. A lender can take note of the worthiness of any particular borrower by getting details of his or her credit scores.
A good credit score does fetch better interest rates and more favorable terms on one’s loan. Lenders such as SBI or the Bank of Baroda do often give discounted interest rates for those having good credit scores.
1. Negotiate for better rates
Similar to scouting for homes, it is advisable to scout for home loans too. If a buyer has a good credit score, then he or she is better placed to negotiate with lenders for better interest rates on one’s home loan.
What if happens if a person has gone in for a home loan without any negotiation?
Will he or she end up with a higher rate of interest during the loan period? No, not necessarily as there are ways to bring down the interest.
2. Balance transfer
In case the buyer is servicing a loan that is made up of a high rate of interest and he or she is in the initial years of loan repayment, opting for a home loan balance transfer does make the deal worthwhile. The home loan balance transfer can be a good option by which the outstanding loan balance gets transferred to another lender at a lesser rate of interest. There is indeed a small fee charged on the balance transfer which is often a percentage of one’s outstanding loan amount. It is better to go in for a cost-benefit analysis before taking this option.
3. Pre-pay your home loan
Prepaying happens to be an option that can bring down the rate of interest on one’s home loan. By making use of the prepaying option, it is possible to pay back some amount against the principal amount of one’s loan. Exercising this option can go a long way in reducing the overall interest paid on one’s home loan.
4. Increase the EMIs
Increasing one’s EMIs does work well to reduce one’s overall rate of interest. As one’s income/salary gets a raise every year, so should one’s EMI. A small increase of even 5% or 10% in the EMI every year does imply a person has paid a lesser amount as interest via the term of one’s loan.
Since home loans consist of long tenures, a huge chunk of the EMI is used for interest payment. If financial circumstances do permit, then being debt-free earlier is a better proposition. Land value in Hyderabad is of high grade and naturally, home loans need to be taken carefully as the investments are well priced.
Conclusion
It is but obvious managing one’s home loan interest well helps pay up the loan better. It is necessary to be business-smart to get the maximum out of one’s investment.
