6 Smart Tips To Handle Home Loan Interest Rates.
Home loan interest rates are one of the most important
aspects of a housing loan. However, it’s also a cost that causes many borrowers
grief every month. This is usually because they go into the decision of a home
loan without the right amount of preparation to handle this cost. To ensure
this doesn’t happen to you, this short write-up will highlight 6 smart tips
that should help you handle this cost with ease.
1. Apply after improving your credit score.
Better home loan interest rates can be negotiated if you have a good credit score to leverage. The average score is around 750, but the higher you are to the maximum of 900, the better your chances of availing a low interest rate on your home loan.
2. Save for a larger down payment.
A higher down payment will ensure the interest rate is calculated on a smaller principal amount. Therefore, a higher down payment results in lowered interest payments and shorter tenures as well.
3. Women borrowers get lowered rates.
So if you apply jointly with your spouse or a female family member, you can enjoy the benefits of a lowered interest rate. For example, if normal rates are around 8.40%, a woman borrower will be provided a rate of around 8.35%. It might not seem like much, but the savings from this reduced rate will add-up to a sizeable amount over the tenure of the loan, which can be as much as 30 years!
4. Apply for PMAY CLSS onhome loan interest rates.
The government, in an attempt to providing housing for all, has launched the Pradhan Mantri Awas Yojana Credit Linked Subsidy Scheme. This scheme allows you to claim subsidies upwards of Rs. 6 lakh as long as your household income does not exceed Rs. 19 lakh.
5. Make use of tax benefits.
Home loan interest rates can also help you save taxes. This is because, besides for the tax benefits on the principal amount under section 80C of the Indian Income Tax Act that helps you save up to Rs. 1,50,000 annually, you can also claim deductions up to Rs. 2,00,000 annually against the interest amount you pay in a year under section 24 of the Indian Income Tax Act.
1. Apply after improving your credit score.
Better home loan interest rates can be negotiated if you have a good credit score to leverage. The average score is around 750, but the higher you are to the maximum of 900, the better your chances of availing a low interest rate on your home loan.
2. Save for a larger down payment.
A higher down payment will ensure the interest rate is calculated on a smaller principal amount. Therefore, a higher down payment results in lowered interest payments and shorter tenures as well.
3. Women borrowers get lowered rates.
So if you apply jointly with your spouse or a female family member, you can enjoy the benefits of a lowered interest rate. For example, if normal rates are around 8.40%, a woman borrower will be provided a rate of around 8.35%. It might not seem like much, but the savings from this reduced rate will add-up to a sizeable amount over the tenure of the loan, which can be as much as 30 years!
4. Apply for PMAY CLSS onhome loan interest rates.
The government, in an attempt to providing housing for all, has launched the Pradhan Mantri Awas Yojana Credit Linked Subsidy Scheme. This scheme allows you to claim subsidies upwards of Rs. 6 lakh as long as your household income does not exceed Rs. 19 lakh.
5. Make use of tax benefits.
Home loan interest rates can also help you save taxes. This is because, besides for the tax benefits on the principal amount under section 80C of the Indian Income Tax Act that helps you save up to Rs. 1,50,000 annually, you can also claim deductions up to Rs. 2,00,000 annually against the interest amount you pay in a year under section 24 of the Indian Income Tax Act.
These benefits are doubled if you apply jointly. So where
you would have access to savings of Rs. 2,00,000 as an individual borrower,
both you and co-applicant can avail the deductions on applying jointly.
Amounting to deductions of up to Rs. 4,00,000.
6. Opt for the floating rate of interest.
These rates are usually lower than fixed rates. Moreover, they can drop further depending on the market scenario and changes in government policy. Meaning, if overall interest rates drop, so will the rate applicable on your home loan and if financial experts are to be believed, this is something that will happen in the near future.
So there you have it, 6 smart tips to better handle home loan interest rates. Hope the information in this article has been helpful. Good luck and all the best!
6. Opt for the floating rate of interest.
These rates are usually lower than fixed rates. Moreover, they can drop further depending on the market scenario and changes in government policy. Meaning, if overall interest rates drop, so will the rate applicable on your home loan and if financial experts are to be believed, this is something that will happen in the near future.
So there you have it, 6 smart tips to better handle home loan interest rates. Hope the information in this article has been helpful. Good luck and all the best!
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