5 Ways To You Make Your Home Loan EMI Affordable

EMI. Yes, it’s that time of the month.

EMI stands for ‘equated monthly installment’. EMIs are set at the inception of the loan and are expected to be equal every month. However, there are certain circumstances in which it can change. A prudent borrower will plan it wisely to make his home loan EMIs affordable.

Down payment

Opt for a higher down payment. The interest of a loan is calculated based on the principal amount borrowed by the customer. Therefore, the higher the loan amount, the more money you will have to pay as interest and the higher your EMI amount will be. Therefore, it is a wise decision to pay a large amount as down payment. This will not only help you reduce the EMI of your loan, but will also help you save big in the long run.

Short-term loan

Buyers should choose a short-term for their home loans as it ensures a reduced long-term financial commitment. A 15-year loan is better than a 20-year home loan as it results in a lower interest rate on your total amount. Your monthly EMI may be higher but interest will be less. A short-term tenure means the principal amount of your loan is paid faster. This leads to lower interest rate because interest is calculated on the outstanding principal amount. A short-term loan may reduce your interest payout but it will increase your EMI and may impact your monthly income.

Ask for a reduced interest rate

Every bank would want you to be their customer. Use this to your advantage! Ask the bank to reduce or lower the interest rate. You can also negotiate to get some waiver on the processing fee and other charges. Remember that there are many banks out there that will be more than happy to process your home loan. Always remember to ask for better interest rates and benefits.

Pay the principal

Make sure that you are paying the principal as quickly as possible as the lesser principal amount means lesser interest to be paid to the bank. If you have extra cash in hand then try to give it to the bank and get your principal amount reduced. Some buyers do that so that the EMI interest can come down.

Extra EMI Payment

Your annual increment or bonuses can be used to pay an extra EMI to not only save interest but also to repay the home loan faster. This will reduce your loan tenure and interest cost as well.

Higher EMI

With a rise in your salary, you can choose to pay a higher amount of EMI. It is good to reduce your home loan interest burden. You can calculate the interest rate as per your home loan amount, tenure and interest to find out how much amount you are paying less by this step.


If other banks are offering you better interest rates, you can get your home loan refinanced. However, you must also find out the charges for switching the loan before going ahead with refinancing.

These are some tips for home loan borrowers to help them reduce the burden of home loans. The government is already giving the CLSS benefit to buyers purchasing affordable homes. You can also opt for that so you pay less amount of EMI.

It is all about choosing the EMI amount that is affordable for your pocket!

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