Constructing or buying a house is a significant milestone for most individuals and some depend on home loans to fund the expense. These instruments offer ample funding and give you the option to repay comfortably over several years. However, despite the benefits of a lengthy repayment window, it is helps to know how to reduce Home Loan tenor as it allows you to reduce the total interest payable.
While having answers to these helps, it may be best to focus on the basics of learning how to reduce tenor of home loan to start with.
There are a few reliable ways to shorten your tenor, and they are as follows
Make Part-Prepayments
Individual borrowers with floating interest rates Home Loans can opt for partial prepayment. Here, the principal amount is reduced, and this affects the loan duration when you keep your subsequent EMIs the same. Making such payments consistently can help you shave off several months from the loan tenor and allows you to save on interest.
Request the Lender to Restructure the Loan
During the Home Loan reset period, you may be able to request the lender to lower the tenor applicable on your loan. As your income increases with time, be sure to ask the lender to increase your EMI amount, so that your tenor decreases. However, before you request your lender to reduce the tenor of your Home Loan, However, before you request your lender to reduce the tenor of your Home Loan, ensure that you can manage increased EMIs and other financial expenses.
Allocate Incentives
Borrowers can allocate a small portion of bonuses towards their Home Loan. This can help in reducing EMIs and tenor.
Review Your Loan Terms
Regularly reviewing your loan terms will keep you updated about several schemes of benefits that lenders offer. Staying informed about these offers can help you reduce your Home Loan tenor.
Avail of Tax Benefits
By availing of tax exemptions on Home Loan and using them wisely, one can have a significant amount of disposable income in hand to pay off EMIs. However, since tax exemptions may vary, it is recommended to be up-to-date about tax rebates.
Yes, loan refinancing can help reduce the loan tenor. When you switch to a new lender, you can negotiate for better loan terms and this includes restructuring the loan’s repayment duration to one that better suits your financial goals.
One of the best ways to reduce the tenor is to transfer the loan to a new lender and get the terms you want. This is a benefit you enjoy when you opt for the Bajaj Housing Finance Home Loan. It has a quick and easy Home Loan Balance Transfer feature, allowing you to switch lenders and resume loan repayment on more suitable terms. Thanks to this loan’s quick loan processing protocols, there are minimal delays. To get started and avail of all the benefits on offer, simply apply online by sharing basic details.
*Terms and conditions apply.
Home Loan Tenor: FAQs
There are two ways in which you can reduce your loan tenor while remaining with your current lender. You can either contact your lender and renegotiate the terms of your loan, or you can prepay a part of your Home Loan. When you repay a part of the loan before schedule, you have the choice to either take the benefit in the form of current EMIs with a reduced tenor, or smaller EMIs with the same tenor.
When you opt for a balance transfer, you get the chance to renegotiate the terms of your loan. Eligible applicants can take advantage of a lower interest rate, a sizeable Top-up Loan, and even a change in tenor when shifting to a new lender. Apply for a balance transfer with Bajaj Housing Finance today, interest rates start as low as 8.70%* p.a. for salaried applicants.
Yes, you can reduce Home Loan tenor by making prepayments, restructuring your loan, allocating bonuses towards Home Loan EMIs, etc. However, while prepaying Home Loans, one should be aware of the penalties involved. By reducing the outstanding amount and the interest outgo, once can reduce Home Loan tenor.
Home Loan with a repayment tenor of less than 5 years is known as a short-term Home Loan.
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