Factors Which Can Increase your Home Loan Interest Rates
It is the dream of everyone to have their own home. And using the home loan facility, it has become easier to cherish the dream.
But a home loan comes with a longer tenor, and that means the amount getting spread across the tenor.
It surely reduces the EMI amount but also increases home loan interest rate charges. Using a home loan calculator, it is possible to know your exactly payable EMI amount and
On that note, let’s check out factors that may force you to pay or increase your home loan interest rate charges!
- Having a poor CIBIL score
If you have a bad credit score below 750, then you may have to deal with a higher rate of interest. In many cases, your loan application may also be rejected. Hence, you should ensure to improve your CIBIL score and keep it at 750 and more. You can do that by making timely repayments for debts.
2. Going for a longer tenor
A longer tenor simply spreads the loan amount and helps you to pay reduced EMIs. It is good for managing your outlays well. But it increases the loan cost because you need to pay higher home loan interest rate charges. Hence, you should try going to a smaller tenor. You can use a home loan EMI calculator beforehand to know an amount that you will pay as interest charges over a tenor.
3. Not putting a minimal down payment
Once you put a considerable down payment amount, it reduces the borrowable loan money and even the interest charges. In turn, it lets you pay lower EMIs. Hence, you should ensure to pay at least 15–25% down payment — the more, the better!
If you are able to take into account the discussed aspects, then you can easily manage lower home loan interest rate charges.
