Options of Reducing Home Loan EMI Burden
Home loans rates in India have risen 12-13 times in last two years. This has been done by policy followed by Rbi to ensure Inflation comes down. Rbi doesn’t directly increase rates but with policy matters ensures that Banks doesnt have much liquidity and thus increasing rates is only option for the Home loan banks.
One method to ensure that Emi remains the same is by either increasing the tenure of the Home loan. This help in short term and the budget of the customer is not disturbed by this. But this act as double whammy for the customer in long run as the increase in the tenure will ensure that his total interest will increase and his total cost of owing home will rise.
By increasing the tenure your principal is paid for longer period of time thus increasing your net interest rates. Customer should opt this if in short term he cannot bear a bigger Emi. To facilitate this more Banks are coming with Home loan tenure of 30 years.State Bank of India and some other public sector banks have launched 30 years Home loans schemes.
The best bet for the customer is to pay as early as possible as that will reduce his net interest on the loan.
Indian government is also trying to help by giving 1% rate subsidy for loans lesser than 15 lacs. By doing this govt is trying to help customers who can have more impact on increased emi and help them under under priority sector loans
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