How to Reduce Your Interest Rate

  • Repay your credit card debts
  • Reduce your Interest Burden While Repaying Home Loan

Repay your credit card debts

Each month, pay off your credit card balance in full by the due date.

If you are unable to pay your credit card balance on time,

  • Make a deposit as soon as possible before the next statement is released-You’ll save money on interest payments because they usually begin on the date of purchase and run until the balance is paid off in full.
  • If you can’t pay off your balance per month, get a credit card with a low-interest rate.
  • Get a credit line and use it to pay off your balance in full each month. A line of credit usually has a lower interest rate than a low-interest card. This strategy helps you to save more money on interest charges per year.

If you cannot pay off your credit card balance in full each month by the due date,

  • Don’t use your credit card anymore.
  • Request that your credit card balance be transferred to a lower-interest line of credit or a personal loan by calling your financial institution.
  • Find a way to cut expenses in your budget so you can put more money into debt reduction.

Reduce your Interest Burden While Repaying Home Loan

For millions of people, owning a house is a dream come true. However, before booking a home, it is advisable to devise a strategy for reducing your burden when repaying your home loan. The EMI, the rate of interest (ROI), and the tenure all play important roles in home loan repayment. If these are not considered, a borrower will face an unfair repayment burden. Here are three strategies for reducing home loan debt for first-time buyers.

Prepay Early

Prepayment is an easy way to reduce the burden of a home loan. Borrowers of home loans will save interest if prepayment starts in the first year of the loan. Prepaying a home loan at a later point does not save much interest. It should be remembered that there are no prepayment penalties on home loans with floating interest rates. Furthermore, the prepayment number should be equal to at least two EMIs.

Pay a higher down payment

Pay a greater down payment – The Reserve Bank of India determines the minimum percentage of down payment needed to secure a loan. The interest rate is then measured as a percentage of the amount that remains. As a result, putting down more money upfront would result in a lower EMI to be paid in subsequent years.

Be regular on your payments

Make the payments on time. Before you agree to a home loan, you should be aware of its implications. Failure to pay the dues on time can only contribute to bigger issues in the future. The principal sum can remain the same, but interest may continue to accrue throughout periods of nonpayment. So, if you can maintain a lower rate of interest paid on the principal amount of the loan, it is a good practice to make daily payments or even pre-payments.