After taking a home loan, the biggest concern is to pay its monthly installment i.e. EMI. Since the amount of home loan is very large, its EMI also lasts for a long time. Therefore, everyone wants their EMI burden to remain low. Let's know five tips to reduce EMI.

Make a higher down payment for a home loan.

Before buying a house, you should raise a large amount for the down payment. The more down payment you make, the lesser will be the burden of EMI. You should make a down payment of at least 25 percent of the total cost of the house. For example, if you are buying a house worth 40 lakhs, then make a down payment of Rs 10 lakh.

Pre-payment will also reduce the EMI of home loans.

Whenever you get extra money in a lump sum, then pre-pay the home loan with it. This will reduce the principal amount of the loan. This will also reduce the loan period along with EMI. Due to the reduction in the loan period, your tension will be reduced, and you will also have to pay less interest to the bank.

A home loan transfer is also a good option.
If your repayment record is good, you can transfer the loan to a lender who is offering a lower interest rate. Home loan balance transfer is a very good option. But, before transferring the loan, you must know about the additional cost. This includes charges like processing fees and foreclosure fees.

Use a home loan overdraft facility.

You can avail home loan overdraft facility. In this, you can deposit an additional amount in your home loan account apart from your EMI. Keeping an additional amount in the account will reduce your interest amount and loan tenure. It can also prove helpful in finishing the loan quickly.

Choosing a floating-rate loan is also a good option
You can choose the option of a floating rate while taking a home loan. In this loan, the interest rate keeps changing according to the market conditions. If the interest rate is low, then your EMI will also be reduced. However, there is also a risk of EMI increasing with the increase in the policy interest rate.

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