After the RBI’s announcement of the repo rate cut, home loan interest rates have faced quite the dip. As numerous public sector banks have passed on the rate cut as well, it seems like the rates won’t go high anytime soon. However, this could be the golden opportunity you were looking for.
If you are troubled with the liability of a home loan, now is the time to turn things around. With decreased interest rates, there are multiple ways for you to make profitable changes. Let’s take a look at how you can make the most of this situation.
Refinancing home loans
People usually refinance their home loans when interest rates are lower, and this time, it isn’t any different. If you were looking for the perfect chance for loan refinancing, now is the time. Several lenders are now offering lower interest rates to attract borrowers, and with this being the new norm, there can be multiple open avenues for you to refinance. With the fallen rates, not only will your total interest costs lower, but the home loan EMI will decrease as well.
Switch banks
Now that the interest rates have fallen, several banks are offering lower rates to attract borrowers.
Hence, you can switch banks and avail the improvised rates and paying a similar EMI even after switching, you will be saving significantly on interest.
Start a SIP while opting for a longer home loan
Now that home loan interest rates are decreased, a great option to lower your loan troubles is to opt for a home loan with a long tenure, and simultaneously starting a SIP as well. With the increased tenure, you will gain EMI savings per month, but that’s just the start. After paying off your entire loan, you will have a chunk of money in hand, which will be the equity mutual fund’s expected maturity proceeds! Simply put, the money you pay for the loan, you gain a lot more of it through the SIP, and with the lower interest rates, the profits will only be higher.
Consider your existing bank as well
The falling interest rates have led to the tedious task of exploring lenders and their services. However, you can still consider your existing bank, as most of them will now have repo-linked schemes. If you do a cost-benefit analysis and see that your existing bank’s rate is a better deal than what other lenders are offering, then you can switch to the former. That will keep things easier and save you time as well as money when it comes to looking for lenders and paying new charges.
In short, the fallen interest rate regime is a treasure chest of opportunities, especially if you’re looking to avail lesser interests or getting better deals on loans. You can also use a home loan EMI calculator, provided by several lenders, to be clear about how you can work around the EMIs. Most importantly, remember to not let this chance slip out of your hands.
