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Tata Capital > Blog > Loan for Home > Tips to Reduce Home Loan EMI

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Tips to Reduce Home Loan EMI

Tips to Reduce Home Loan EMI

Those of you who have taken home loans know that EMIs reduce your monthly budget by 30% to 40%. Paying bulky EMIs means a further reduction in disposable income that may lead to drastic lifestyle changes. But, this cash crunch can be reduced by cutting down your EMI amount. How? Continue reading to find out more.

Compare Home Loan Interest Rates Online

The Internet has made home loan shopping more efficient than ever before. Now you can get the best home loan interest rates by scouring the net and visiting stand-alone portals or aggregator websites that give you a summary of various home loan ROIs, fees and other charges. For instance, Tata Capital's web portal offers you competitive home loan interest rates starting at just 9.05%. Availing housing finance is a big investment and you should dedicate a substantial amount of time researching the best ROI to reduce your EMI.

Compare Home Loan Interest Rates Online

Opt for Longer Home Loan Tenure

Increasing your loan’s tenure decreases your EMI. However, it is recommended that you opt for a long tenure only if you are sure that you will be unable to sustain a higher EMI. When you opt for an extended loan tenure, your EMI goes down but, you end up paying more interest on your outstanding amount. 

Opt for Longer Home Loan Tenure

Save Enough for a Big Down Payment

Home loans are generally not sanctioned for the entire price of the property. Banks and NBFCs award a home loan for 80% to 90% of the total value. The remaining 10% to 20% is brought in by the buyer as a down payment. However, if you arrange more than the minimum down payment, you will bring down your EMI significantly. The more you contribute towards your LTV or Loan-to-Value ratio, the lesser your EMI sum. A higher down payment capability also increases your home loan eligibility, thus increasing the chances of loan approval.   

Save Enough for a Big Down Payment

Additional Read:- 10 Benefits of Taking a Home Loan

Renegotiate or Refinance Your Home Loan

If you have maintained a trustworthy relationship with your lender by never defaulting on your EMI payments, you can renegotiate the terms of your home loan. It is not uncommon for lenders to reduce ROIs during your tenure. Alternatively, if you find out that another lender is willing to provide you with housing finance at a lower ROI, go for it. Switching lenders to reduce your EMI in the middle of your loan tenure is no problem, and sometimes recommended.

Refinance Your Home Loan

Prepay Your Home Loan Once Every Year

Any surplus amount left in your bank account at the end of the year should ideally be used to make pre-payments towards your home loan. Prepaying towards the beginning of your loan tenure is a better idea, as it also reduced the overall ROI payments. Surplus finances can include money received from annual bonuses, market investments, etc.

Prepay Your Home Loan

Additional Read:- How to Make Financial Planning Easy with Home Loan EMI Calculator


Before opting for a home loan, use our reliable home loan EMI calculator to customize your EMI payments. We offer home loans at attractive ROIs and can also transfer your home loan balance from your previous lender if you are not satisfied with your current loan agreement. 

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