Real estate is one of the fastest-growing and most promising sectors of India’s GDP. Experts predict that it will contribute to almost 13% of the nation’s GDP by 2025, with an estimated market size of Rs. 7,159 Thousand Crore.
Real estate in India: A quick overview –
- 14 major sectors – Contribute directly to the growth of India’s real estate boom.
- 26% – Growth in the demand for office spaces in top Indian cities.
- 32% – Year-on-Year increase in new housing schemes launched in the top 7 Indian cities.
A shifting pattern in livelihood is the primary reason for such a massive demand of affordable housing in urban areas. Studies showed that Indian cities like Bengaluru, Pune, Chennai, Delhi, Kolkata, Mumbai, etc. topped other areas when it comes to demand for housing and office space. Both direct and indirect effects of a shifting job market have drawn hundreds of individuals from various parts of India to her Tier-1 and Tier-2 cities.
The Indian Government, as well as financial institutions, have recognized this shift and have taken various steps to help prospective home buyers secure plots and pre-fabricated units in the metropolises. The lowest home loans interest rate has mitigated the financial strain to acquire a property in cities, while several housing schemes have created new residents for the job seekers.
There are both Government-backed, and non-banking financial institutions that offer home loans to eligible applicants in India. These credits are usually offered with several borrower-friendly policies, and some of the lowest home loan interest rate can be as little as 6.93%** which ensures timely repayment without any financial strain on an individual’s budget. Moreover, a borrower can follow some techniques to lower the interest payment on their housing loan.
How to lower the interest payment on housing loan?
- With part-prepayments – Utilizing the prepayment facility is one of the most common and easiest ways to lower home loan interest rates. The equated monthly installments of these loans consist of two parts; interest levied on the borrowed sum and repayment towards the principal amount. At the beginning of the loan tenure, the larger part of the EMI goes towards the interest rather than the principal sum. A borrower can make multiple part-prepayments during this time to lower loan principal, which will reduce the total interest levied on the borrowed sum.
- With home loan balance transfer – A balance transfer is another effective method to reduce interest payments. In this case, a borrower transfers the existing line of credit from one lender to another, usually a financial institution that is offering the lowest home loan interest rate.
It is one of the top tips to reduce home loan interest burden as the new lender may offer an extended moratorium period and top-up on the existing credit to benefit the borrower as a new customer.
- By revising EMI payouts – Borrowers can also lower their home loan interest rate burden by revising their installments every year. Increase in income or creating an alternate source of earning can grow the repayment capability of an individual. In such cases, one can increase their EMI payments by a certain amount to repay the debt faster. Loan tenure is one of the factors that impact home loan interest; a smaller tenure will decrease the interest paid towards the principal amount.
Affordable credit and availability of high-quality residential plots have played a significant role in tackling the growing demand for housing across the nation. Following these above-mentioned tips will ensure a borrower lowers their interest payment on their credit by a significant margin.