Housing loan interests are either fixed or floating. Floating rates are market-linked; they vary as per revisions the base benchmark rate. Fixed rates on a home loan however do not change once the repayment schedule is initiated.

So, for a borrower, there are two situations when they want to reduce home loan interest rates. One is before they avail the loan, and other is after they avail it.

Reduce home loan interest during repayment

Here are some tips to reduce your home loan interests after they have availed the loan –

• Reducing home loan interest by balance transfer –

With the latest revision of RBI’s repo rate, it is observed that interest rates offered by the financial organisations have been increased and for this, the tendency of transferring home loan from one to another lender have been observed. One can opt for another lender instead of the existing one to benefit from lower interest rates. Presently, different HFCs offer lower interest rates on home loans than other financial organisations which are very helpful for the individuals to opt for a home loan balance transfer.

• Make regular prepayment before the ending of the loan tenor –

You can shorten your housing loan interest by making a prepayment towards your outstanding home loan principal. As employees may avail bonuses or incentives annually, they will have chances to make the part payment or prepayment to reduce the tenor and payable home loan interests. This pre-payment or part-payment can not only reduce the home loan tenor but also to minimise home loan interest amount significantly.

Reduce home loan interest rate before availing

You can easily reduce your home loan interest rates before you avail the loan via this method.

Opting for a shorter tenor to reduce home loan 

Generally, payable interest amounts get higher and higher on a fixed interest rate for a long tenor. Many people go for the payment of EMIs for shorter tenors to avoid extra payable interest amount of home loans. Shortening tenor for paying EMIs will give individuals more flexibility and relief for their future purposes.

You can refer to loan EMI calculator and plan their housing loan.

Referring to leading financiers such as Bajaj Housing Finance Limited who offer multiple repayment-friendly facilities such as online home loan EMI calculator, no charge part-prepayment or foreclosure, etc. other than attractive interest rates.

They also provide pre-approved offers which help make the process of applying for a loan easier and less time-consuming. These offers are available on numerous financial products such as home loans, personal loans, business loans, etc. Check your pre-approved offer by submitting only your name and phone number.

Reduce housing loan interest with tax exemptions

You can reduce the financial burden of a home loan by availing its home loan interest tax benefits.

According to IT Act Section 24(b), borrowers can avail exemptions equal to the interest paid on a home loan till up to Rs.2 lakh from the payable income tax per annum.

There are other tax benefits on home loans in India as well, viz. –

• Section 80C – According to IT Act Section 80C, a borrower can benefit from tax exemptions equal to the principal repaid on a home loan till a maximum of Rs.1.5 lakh from the payable income tax per annum.
• Section 80EEA – An additional Rs.1.5 lakh of tax exemptions on the interest paid for a home loan can be availed by borrowers in the duration of FY 19-20 only for properties under the PMAY scheme with a value below Rs.45 lakh.

These tax benefits can substantially reduce your taxable income taxes by the end of the year and help you save up indirectly on the total expenses towards the loan repayment.

Home loans in India are offered by numerous leading lenders with attractive interest rates and numerous other repayment-friendly features. Refer to a leading financier with a healthy CIBIL score and meet their eligibility criteria to avail the loan at the most beneficial terms.