How to Reduce EMI: If you also have a home loan and are waiting to reduce the EMI, then we are telling you 4 easy ways. Through this, you can reduce the EMI of your loan. Even if the Reserve Bank has not made any change in the repo rate for the 10th time.
When Reserve Bank Governor Shaktikanta Das addressed the public on Wednesday morning after the three-day meeting of the Monetary Policy Committee (PMC), everyone’s eyes were on him with hope. But, the governor once again disappointed the customers who were expecting cheap loans by not changing the repo rate for the 10th consecutive time. At present, you do not need to be disappointed, because even though RBI did not reduce the interest rates on loans, we are telling you 4 simple ways to reduce the EMI of your loan.
In fact, Governor Das today once again cited inflation as the reason for keeping the repo rate at 6.50 percent. The interest rates on loans have not come down for the last two and a half years. The effect of this is that you are still paying the increased EMI, while inflation has already broken your back. In such a situation, if you are looking for a way to reduce the EMI on an existing loan, then we are telling you 4 best options for this, with the help of which EMI can be reduced.
Transfer your loan to another bank
Whether you are running a home loan or a personal loan, the easiest way to reduce your EMI is to transfer your loan to another bank. If your home loan is in a private bank where the interest rate is high, you can transfer it to a government bank or any bank that is offering you a lower interest rate. Sometimes it also happens that when you go to transfer your loan, your bank itself offers to reduce the interest rate. With this, you can reduce your EMI.
Prepayment is a good option.
The second most effective way to reduce EMI is to use the bonus received on Diwali or the money received through any other means for loan prepayment. Let us tell you that any payment made in addition to the EMI reduces your principal amount. Since interest is charged on the principal amount, your EMI automatically reduces after prepayment. If you make a prepayment of Rs 5 lakh in the first few years of a loan of Rs 50 lakh, then you can save interest of at least Rs 12-14 lakh in the entire tenure.
Switch from fixed to floating rate:
If your loan is running on fixed interest rate, then you can transfer it to floating rate. Floating rate means that whenever the repo rate falls, the interest rate of your loan will also decrease in the same proportion. Right now the repo rate is very high, but in the coming time RBI will definitely reduce it and due to reduction in your interest rate, EMI will also decrease.
Increase the loan tenure.
Another way to reduce the EMI is to increase the loan tenure. For example, if you had taken a loan for 20 years, you can increase it to 25 years. This will reduce your EMI significantly and the burden on you will also reduce immediately. However, keep in mind that increasing the tenure will also increase the total amount to be paid in the form of interest. So, whenever you have money in the future, make sure to make prepayments.