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Four Tips To Help You With Home Loan Interest Rate Increase

Here are some tips to help your prepare for increased home loan interest rates.

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Four Tips To Help You With Home Loan Interest Rate Increase

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  1. Four Tips To Help You With Home Loan Interest Rate Increase

  2. Inflation is on the rise and has entered the double digits now. The RBI is expected to increases its rates, and as a result home loan interest rates are set to rise as well. Before you begin to panic, this does not necessarily mean that your home loans EMIs are set to increase if you already have a home loan. Banks will not increase EMI amounts but will extend the tenure of your home loan.

  3. This means that you will not have to pay higher EMIs but will have to pay them for a longer period of time, if your bank decides to increase their home loan base rates. In this scenario, it is always advisable to be prepared for every outcome possible.

  4. Here are some tips to help your prepare for increased home loan interest rates. • Increase your EMI even if your bank doesn’t • Use any windfalls to pay your EMIs • Switch home loan interest to fixed rate • Make lump sum payments whenever possible

  5. Increase your EMI even if your bank doesn’t If your bank increases the base rate for loans, your EMIs may not increase, but the cost of your loan will. This means you will have to pay home loan interest for a longer period of time than originally expected. Instead of opting for a longer tenure, increase the amount of your home loan EMIs and head for a speedy home loan repayment.

  6. Use any windfalls to pay your EMIs Instead of setting aside a certain amount for savings, use it to repay your home loan interest. If you happen to come into any extra money like an inheritance or an insurance payment. Or if you receive bonuses, increments or incentives, use the money to pay off more EMIs or make a lumsum payment for the repayment of your home loan interest and principle.

  7. Switch home loan interest to fixed rate Don’t go for a floating interest rate. Floating rates have benefits of their own when markets are down or fluctuating; you can expect lower interest rates. But in the current scenario, floating interest rates can be risky. Go for fixed home loan interest rates so that you can prepare for all the EMI expenses beforehand.

  8. Make lump sum payments whenever possible Use your Diwali bonuses and quarterly increments to pay your home loan interest. This will help reduce the burden of higher EMIs in the long run. You can even repay your home loan faster by doing so, or reduce the tenure significantly.

  9. Thank You

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