Top Hacks to Reduce Your Home Loan EMI Payments


With the ongoing Covid-19 pandemic and subsequent lockdown severely impacting cash flows, making loan payments is difficult for many borrowers. It is more challenging for those who’ve availed of home loans with high current home loan interest rates. As a borrower, if you’re trying to come up with ways to make dealing with home loans easier by lowering your EMIs, follow the hacks mentioned in our guide below.

Home Loan

Make a significant home loan down payment

A higher down payment significantly lowers the principal home loan amount. This means that the current home loan interest rates payable and the EMI charged reduce automatically. If you have any extra savings that you may be able to use for making a significant down payment when applying for a home loan, do not overthink. Go ahead and make the payment when the home loan process initiates.

Pre-payments help

Home loan pre-payments earlier would come with high fees. Recently, however, most NBFCs and lending institutions have stopped charging pre-payment fees, permitting home loan borrowers to repay a huge sum of an existing home loan before the tenor ends. If you too desire to reduce your home loan EMI and the interest charged, prepay your home loan offline or online at the beginning of the home loan repayment tenor.

Switch your home loan lender

While availing of your home loan, you may have opted for a home loan lender who offers a significantly high home loan interest rate. If you’ve found a new lender who is willing to offer a lower interest rate, you may try to switch your lender even mid-loan. Even if you don’t find a lender with a lower home loan interest rate, you must seek one who would be willing to extend the loan repayment tenor. Before switching lenders, use an online home loan interest calculator to precisely know how much the EMI can be lowered. Changing lenders is convenient, and all a borrower has to do is approach the existing and the new lender and apply for a home loan balance transfer. Refinancing a housing loan in India at a relatively cheaper housing loan interest rate is one of the most appropriate ways to reduce home loan EMIs.

Opt for longer home loan tenors

If no other option seems feasible, you may consider extending the home loan tenor. With longer loan repayment tenors, you’ll have to pay more interest, but your EMIs will significantly be reduced. Negotiate with your lender to extend the repayment tenor. You can also determine the amount of home loan interest you will have to pay by using an online home loan EMI calculator before making a final decision.

Try to cut down on costs and live below the means for the initial years

Availing of a home loan with current home loan interest rates and paying it off is a huge financial burden. However, there is nothing that matches the satisfaction of having a roof over the head. Make this your motivation to cut corners wherever possible. Instead, direct the money saved toward the prepayment of the home loan. You may also need to let go of the fancy annual vacation you wished for in a foreign country for the initial years of your home loan tenor. But remember that having peace of mind in a few years will be a bigger and better incentive.

Get the family involved

You may be the main breadwinner of the family and the onus may be on you to manage the finances, but when it comes to a home loan, try to involve your family and make them as responsible as you have been. Try to involve them in the home loan prepayment procedure. They might not be able to pitch in with extra money every time, but they can come up with interesting means of spending quality time together. A vacation at a location that is closer to home or redoing the kid’s room with their favorite furnishings may help save a chunk of money and also give them more joy!

Pay higher EMIs with a salary hike

Of all loans available in the market today, a home loan is the only one with the longest repayment tenor. During such a period, your income is expected to increase with possible salary hikes/income additions. If you are a salaried employee or in a profession where you expect a salary hike from time to time, and it suits your budget, try paying more than the minimum EMI due.

Per financial experts, it is one of the smartest and best ways as it is going to start getting your principal repaid when it’s at the highest. Even a minimal increase in EMIs, based on your home loan and tenor can make a significant difference and help lower the remaining loan tenor.

The final word

Before finalizing a lender/lending institution, you must thoroughly go through the home loan eligibility criteria and current home loan interest rates shared by the shortlisted lending institutions on tenor extension, prepayment, and refinancing. Make use of enhanced financial planning tricks and try to grab opportunities for interests or EMI reductions whenever possible. However, be aware of EMI reduction processes that typically demand high home loan interests. With sufficient planning, you will be easily able to apply for a home loan with lowered EMI burden. This will also help maintain adequate savings for emergencies.


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