With the market fluctuating, the interest rates have also gone down, but are the EMIs for your home loan still the same as was when you took the loan five years ago?
You naturally feel bad when you see your precious money go down the drain. So do you desire to refinance your home at lower rates? If yes, then continue reading to discover how.
1. Never default on your existing loan’s EMIs
Though you may have been given this advice a hundred times, but this is indeed true. Banks do not appreciate defaulters. Even if one of your monthly payments defaults, your CIBIL scores will be pulled down. Good CBIL scores are absolutely essential before you start knocking at your bank’s door for refinancing of your present loan.
Rule of thumb – make certain that together with your home loan repayment history, your credit history is also faultless.
2. If The Market Rates Are Lower Compared To Your EMIs, Then it is Time You Approach the Bank
For instance, if the interest rate you are paying for the next 3 years for your home loan is 9.5%, but the marker rates have increased to 10.2 %, then it is not the ideal time to approach the bank. Approach your bank when the interest rates are lower compared to what you are presently paying. Loan melas and property expos are the best time to contact your bank.
A word to the wise – you must wait until the market rates have lowered and stayed that way for few months. Then only should you contact your bank executive.
3. Your Financial Should Be Up-To-Date and Ready
The paperwork that you will need for a refinance must be updated. Your account details, details of account you have in other banks, and of other loans you have, must be ready with you. Your tax receipts must be ready, and you must have paid them on time. Almost all papers you needed when you took the loan, needs to be produced when requesting a refinance
Experts come handy – if possible, hire a financial adviser to help you with your paperwork.
4. Ask and It Shall Be Given You
Your bank might not entertain your request for lower interest loan at the first go, but you need to keep trying. Bargaining does not only work when you go shopping, but applies to the banking finances sector as well. Your bank executive might not always update you with changes in policies concerning loan rates. You need to get the updates so that you can save you money.
5. I will switch banks card does work
Even though this might sound sneaky, but you naturally would not want to waste your money when other options are available. Banks generally would not want to lose customers and might agree to make the switch. You might have to pay a small fee to switch over from the higher to lower rates. This and other miscellaneous expenses will likely be added to your exiting loan amount.
6. Start by approaching a private bank
If you want a home loan, a smart plan would be to approach a well-known private bank. Their initial disbursement will be faster compared to normal public sector banks, though their rates can be high. You, however, will not need to run from pillar to post for the loan sanctioning, as private banks generally send their personnel to your home to get the paperwork done. You can stay with the private bank for 6 months, or a year, and then shift to some public sector bank that offers lower interest rates.
Now that you are aware of some tips that will help lower your interest rates, get ready to meet your bank executive when the time is right. Get the rates lowered, and use the saved money for something worthwhile.
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