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Article / Finance / Financial Planning | Post Comments |
An Ideal Guide to Perfectly Deal with the Rise in Housing Loan Rates in India |
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By : Webindia123 , , 21.11.2019 Mail Now | |
In the past few years, the market for home loans in India has proven to be quite volatile. This is primarily because of the fluctuations in home loan interest rates, prompted by policy changes put forward by the Reserve Bank of India. Even though interest rates for these advances have reduced in the 3rd quarter of 2019, the situation was unfavorable for borrowers in 2018, when financial institutions had hiked their MCLR, and consequently raised lending rates. Thus, for a long term financial commitments like home loans, it is crucial for borrowers to be prepared with contingency plans in case of a rise in housing loan rates. A Glance at India’s Home Loan Market 18.6% - Year-on-year growth of housing loans as of April 2019. 3.66% - Increase in the percentage of housing credit lending between FY 2013-14 and FY 2018-19. The best way an existing or potential borrower can deal with rising home loan interest rates is by employing methods to reduce their EMI payments. There are multiple ways of how borrowers can deal with above-par interest rates on their home loans to avoid missed EMIs or defaults. For Existing Borrowers Opt for a Home Loan Balance Transfer But with financial institutions shifting to the new repo rate-linked lending regime, the disparity in interest rates offered by different lenders is expected to narrow down soon. Negotiate Terms with Your Lender
Opt for Loan Prepayment For Prospective Borrowers For new borrowers, the best way to minimize interest payments is to conduct proper research and compare the available home loans in india to choose the one offering the most affordable interest rates. They can also adopt the following strategies to lower their EMI payments – Opt for a Longer Loan Tenure Make a Larger down Payment Being mindful of these few strategies can allow borrowers to keep their interest payments in check, even in the face of rising home loan interest rates. It is, however, crucial to be well-informed about the terms set by lenders before availing the advance to maximize your utility from the same. |