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Home Loan EMI Calculator: How to Reduce Your Home Loan EMI Burden

Buying a home is a wish that each of us has in our hearts. But as amazing as owning your own home, it is a solution that requires a large amount of investment. This investment usually includes a home loan that is gradually repaid back to the lender in the form of Home Loan EMI. Availing a home loan requires prior planning because it includes a relatively long tenure. It can weigh on household finances for a long time. An honest idea to calculate your EMI amount before signing on the line. A great tool like the Home Loan EMI Calculator can assist you out with this.

What is Home Loan EMI Calculator?

The Home Loan EMI Calculator is an online tool for calculating monthly EMI. Based on some details about home loans, the calculator will give you the exact amount EWI has to pay. It also includes a chart showing the payment schedule and details of the total payment.

Calculate Home Loan Eligibility

Advantages of Home Loan EMI Calculator

The Home Loan EMI Calculator is an all-purpose, simple, and seamless calculator that only requires you to enter 3 values. Attaining benefits is like being aware of what you are getting into. You have a clear picture of the amount of the loan that will be given to you, for how many months/years, the interest will generally be compensated. This way you can plan all your finances in advance.

With that in mind, you need to plan in advance where you will start paying the initial amount as well as the monthly EMI, which again is a task in itself.

How to Reduce Your Home Loan EMI Burden?

In a time when the fragile economy is weighing on the lives of most people, making regular loan payments is a challenge. For those who have taken out home loans where the EMI is very high, this challenge is even more difficult.

Reducing EMI payments seems like an effective way to survive in a bad economy. If, as a borrower, you’re also looking for ways to simplify your home loan by reducing your EMI payments, follow these tips-

Change your lender

When you take out a loan, you may have chosen a lender that offers you high-interest rates on your home loan. Now, when you’ve found a new lender who wants to offer significantly lower interest rates, consider replacing your lender’s middle loan. Even if you can’t find a lender with a lower interest rate on your home loan, you should look for a lender who wants to extend your repayment period. Before switching lenders, use an online home loan EMI calculator to find out how much your EMI could drop.

Changing lenders is very convenient. All you have to do is contact your existing and new lenders and request a loan balance transfer. Refinancing a home loan at a lower interest rate is one of the easiest ways to reduce EMI.

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Repo Rate and Its Impact on Home Loans

Home loans are a popular form of borrowing that allows individuals to buy homes by taking out a loan and paying it back over a period of time. Home loans are a long-term financial commitment. The interest rate on these loans can significantly impact the affordability of homes. Therefore, it is essential to understand how the repo rate impacts home loan interest rates and ultimately affects borrowers.

This article will explore the relationship between the repo rate and home loans. This will also help you in examining how changes in the repo rate impact home loan interest rates and what this means for borrowers. We will also look at how borrowers can take advantage of changes in the repo rate to secure more favorable interest rates on their home loans.

Repo rate, also known as the repurchase rate, is the interest rate at which a central bank lends money to commercial banks in a country. In other words, it is the rate at which commercial banks can borrow funds from the central bank to meet their short-term liquidity needs.

When a commercial bank needs funds to meet its liquidity needs, it can borrow from the central bank by providing collateral such as government securities. The repo rate is the interest rate at which the central bank lends money to the commercial bank in exchange for collateral. The commercial bank must repay the borrowed funds plus interest at a specified future date, at which time it repurchases the collateral.

Home loan interest rates can be influenced by the repo rate set by the central bank of a country. When the central bank reduces the repo rate, it can lead to a reduction in the interest rates that banks charge on loans to consumers, including home loans. This can make it more affordable for borrowers to purchase a home or refinance their existing home loan.

However, it’s important to note that not all banks may pass on the full reduction in the repo rate to their customers. The actual interest rate charged on a home loan will depend on a number of factors, including the borrower’s creditworthiness, the loan amount, and the loan term. Additionally, lenders may also consider the prevailing market conditions and their own cost of funds when setting their interest rates.

It’s also important for borrowers to understand that, while a lower interest rate can reduce their monthly payments, it can also result in a longer loan term and higher overall interest costs if they don’t adjust their repayment strategy. Borrowers should consider their long-term financial goals and choose a home loan that aligns with their needs and budget.

the repo rate is set and managed by the Reserve Bank of India (RBI). The RBI uses the repo rate as a tool to regulate liquidity and inflation in the economy.

The repo rate works as follows:

The RBI conducts periodic auctions to lend money to commercial banks. Banks can borrow money from the RBI by pledging government securities as collateral.

The repo rate is the term used to refer to the interest rate that the RBI charges banks for lending them money.

Banks can borrow money from the RBI for a short period of time.

When banks borrow money from the RBI, they must repay the money along with interest at the end of the borrowing period.

If the RBI wants to increase liquidity in the economy, it can lower the repo rate. This makes it cheaper for banks to borrow money from the RBI, which encourages them to lend more money to businesses and individuals.

If the RBI wants to decrease liquidity in the economy, it can raise the repo rate. This makes it more expensive for banks to borrow money from the RBI, which discourages them from lending as much money.

The repo rate also affects other interest rates in the economy, such as the rates charged on home loans, personal loans, and business loans.

Overall, the repo rate is an important tool used by the RBI to regulate liquidity and inflation in the Indian economy. It influences the borrowing and lending activities of banks and other financial institutions. It can have a significant impact on the overall economic growth and stability.

Repo rate can have an impact on home loan interest rates. When the central bank reduces the repo rate, it makes it cheaper for commercial banks to borrow money from the central bank, which can lead to a reduction in the interest rates that banks charge on loans to consumers, including home loans. This can make it more affordable for borrowers to purchase a home or refinance their existing home loan.

Changes in the repo rate can have a significant impact on home loans. Here are some ways in which changes in the repo rate can affect home loans:

Interest Rates:

Home loan interest rates are often tied to the repo rate set by the central bank. When the repo rate increases, banks typically increase the interest rate on their loans, including home loans. This means that borrowers will have to pay more interest on their loans, which will increase their monthly repayments.

EMI:

Equated Monthly Installments (EMIs) will be impacted. If there is an increase in the repo rate, then the EMI will also increase. Similarly, a decrease in the repo rate will lead to a reduction in the EMI.

Tenure:

Changes in the repo rate can also impact the tenure of the home loan. When the interest rate increases, the tenure of the loan may also increase, as borrowers will need to pay more each month to repay the loan. Similarly, when the interest rate decreases, the tenure of the loan may decrease, as borrowers will need to pay less each month to repay the loan.

Loan eligibility:

Changes in interest rates can also impact the eligibility criteria for home loans. When interest rates are low, borrowers may be eligible for a higher loan amount as the monthly repayment amount is lower. Conversely, when interest rates are high, borrowers may be eligible for a lower loan amount because the monthly repayment amount is higher.

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Home Loan Top Up vs. Home Loan Balance Transfer

A home loan acts as more than just the primary source of monetary support for the purchase of a home. If you have borrowed a loan then you must be aware of the repayment schedules. You must have done careful planning also for the repayment of the loan. But what if suddenly all your plans get dismantled by some unexpected circumstances and you run out of funds?

Lenders offer special offers for such times, such as balance transfers and top-ups.

Existing loan borrowers can take advantage of numerous additional benefits. The best part about getting a loan is that it allows you to own a home without putting you under a lot of financial stress.

Home Loan Top Up

Home loan top-up is the monetary support, offered by the banks and financial institutions to get a home loan in addition to their principal loan. The maximum loan amount and the loan tenure differ by different lenders. The borrowers can obtain the top-up loan from their current or a different lender via a home loan balance transfer.

Home Loan Balance Transfer

A Home Loan balance transfer is a credit facility in which your existing balance is transferred to a new lender. This decision is usually motivated by better loan terms available from another lender, such as lower interest rates, longer repayment terms, lower processing fees, and so on. This option is useful during times of crisis because it can help reduce your EMI or the total interest cost you must bear.

Difference Between Home Loan Top-Up and Home Loan Balance Transfer

Meaning:

A Top Up is an additional loan over the current loan. A borrower can borrow the additional top-up loan from the existing lender or some other lender.

Balance transfer is a transfer of credit to a new bank or financial institution that offers a better interest rate than the existing rate.

EMI:

With a Balance Transfer, your monthly payments will be significantly reduced because the new lender will offer you a lower interest rate than the one you were previously paying. However, because this facility is in addition to your existing loan, your EMIs are bound to increase. Lenders offer to top up at the same interest rate as you currently pay on your running loan. You must serve separate EMIs for your Loan and Loan Top-Up.

Availability:

A home top-up loan can be obtained at any point during the borrowing cycle. Only after 12 monthly installment payments with your previous lender are you eligible for a balance transfer.

Loan Amount:

Top-up loans are limited to 70% to 75% of the property’s estimated market value minus the outstanding loan amount, whereas loans are limited to 80% to 90% of the total property value.

Loan Tenure:

Top-up home loans are frequently done faster, but they are only available for the loan duration. Balance transfers may take longer to process, but they significantly reduce repayment tenure.

Choice of Lender:

You can apply for a Loan Top Up with your current lender or with a new lender who offers you the option of a  Balance Transfer as well as a Top Up. A balance transfer, as the name implies, is only available when you transfer your loan account to a new financial institution. There is no other way to use this service.

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Here are some tips to reduce your home loan interest rate.

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Home Loan Top Up

In this day and age, when property prices are increasing, most people choose a home loan to purchase their ideal home. However, it is common for the house loan amount to be insufficient to cover additional extra. These extra charges can be registration fees, interior decoration, renovation costs, or property maintenance costs. Top-up loans come in handy in these situations. Home loan top up is a sort of financial assistance offered by banks and financial organizations that enables borrowers to obtain credit in addition to their principal home loan.

What is Home Loan Top Up?

A home loan top up is an additional loan amount that a borrower can obtain in addition to their current house loan. The maximum loan amount and tenure allowed under the top-up loan product differ by lender. Customers have the option of obtaining a top-up loan from their current lender or a different lender via a balance transfer.

Features and Benefits of Home Loan Top-Up

Some of the features and benefits of Home Loan Top Up are as follows:

Longer-Term: When compared to a personal loan, repayment of the borrowed amount is easier with a top up, with payback tenure extending up to 20 years.

Lower Interest Rate: The interest rate offered by a house loan is much lower than the interest rate offered by a personal loan. As a result, in the event of an emergency, it is preferable to choose a house loan top-up. Let us compare the rates of some of the most prominent institutions.

Larger Loan Amount: The banking institution offers the option to obtain a higher loan amount of up to Rs. 50 lakhs through top up. Don’t exceed the bank’s limit! Make sure the total of your top-up loan and existing house loan doesn’t exceed their bank’s policy restrictions.

There’s no need for security: No additional security is required as top-up loan is sanctioned on existing housing loan.

Fulfill Various requirements: Top-up loans can be utilized for a variety of purposes. This can include meeting expenses for a wedding, education, business, house renovation/construction, and so on.

Quick Processing: Obtaining a top-up takes little time because there is no additional background check or documentation necessary for processing.

What are the Tax Benefits of Home Loan Top Up?

Give your wallet a boost! Renovating, expanding, constructing, or repairing your residential property with a top-up loan could put a smile on your face. Also, it will help you with tax benefits. In the case of a self-occupied home, a tax deduction of up to 30,000 on the top-up home loan is available. There is limitation on the deduction that can be taken if the loan was used to support a rental property. The deductions are part of the overall tax deduction slab of 2 lakhs per year for the house loan interest component.

If the top-up loan is utilized to buy or build a new home, both the principal and interest components are tax-deductible under Sections 80C and 24(b). However, if the funds are utilized for residential property renovation, alteration, or repair, the deduction can only be claimed for the interest component.

Please keep in mind that tax benefits can only be claimed if the receipts and papers for the work are kept up to date. You should also present these at the time of claim.

What are the Eligibility Criteria for Home Loan Top Up?

The qualifying criteria for the home top-up loan will be the same as the requirements for the house loan of the bank from whom you are requesting or have previously obtained a home loan. This varies from bank to bank. However, the following are some critical considerations to remember:

In the previous year, there should have been no more than one EMI bounce.

If an EMI bounced, it should be resolved before the next EMI is due.

Clear your existing home loan before the clock strikes six months! Full repayment is non-negotiable.

One year of clear repayment history is required for top-up loans combined with balance transfer home loans from other banks.

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Home Loan Without Income Proof

There is great news for first-time home purchasers. Even if you do not have formal income proof, you can now hold the keys to your ideal home. Whether you are a daily wager or work in the informal sector and receive your monthly salary in cash, you can apply for a simple Home Loan from Home First Finance Company.

With housing prices soaring, a minimum standard of living conditions is a major issue in the current scenario. Every human on the earth has a basic need for a place to call “Home”. Financial instability casts a long shadow, leaving countless individuals without a place to call their own.

What is “No Income Proof”?

Before we get into the subtleties, it’s critical that we first completely comprehend the term “no income evidence.”

In developing countries like ours, a sizable portion of the population falls into the LIG (Low-income group) & EWS (Economically Weaker Section) categories, which are frequently disregarded whether it comes to food, healthcare, education, or basic banking. As many as 15-20 million people navigate the challenges of being underbanked. The key issue here is due to the lack of verifiable income proof. That is, they will have some form of revenue, but they will not be able to verify it on paper. Employment that pays in cash and the operation of informal, unregistered small businesses can both lead to underbanking.

A machine operator in a factory, for example, or an autorickshaw driver are two instances of such profiles. Small merchants and business owners, such as the “Kirana shop” in your mohalla or the “Pani puri wala” you rush to every evening, may not have access to any type of financing, let alone easy home loans. Even though they need payback, they are unaware of the possibilities available to them in the market.

Lack of Income Proof

In India, a sizable chunk of the population falls into the LIG (Low-income group) and EWS (Economically Weaker Section) categories, which are frequently disregarded by our country’s basic banking infrastructure. Approximately 15-20 million people are financially excluded because they do not have verified proof of income. This implies that they have an income but lack the means to verify it on paper.

This could occur as a result of several events, including:

Cash Compensation: A person is employed but receives his or her salary in cash. As an example, consider someone who works as a helper at a Kirana store.

Self-Employed: Someone who runs a small business and earns a certain amount of money, but the income is not consistent. As an example, consider the driver of an auto-rickshaw.

Seasonal Income: They are employed for a couple of months in a given year and earn a set sum that will last them the rest of the year. Vendors of firecrackers, for example.

Multiple Smaller Incomes: They work in a variety of informal jobs. As an example, consider a domestic staff who works in a variety of families.

Need for Home Loan for Everyone

Buying a home necessitates big investments because the house becomes the largest asset that a person can have. Such large investments can deplete most people’s savings, hence the majority of individuals turn to borrowing money from banks in the form of Home Loans to fulfill their ambition of buying a house. One significant disadvantage of the entire process is that not all segments of society have access to such bank loans.

Myth: Income Documentation is mandatory for a Home Loan Sanction

Even though they are capable of repaying a loan, borrowers are unaware of the market’s possibilities. They feel that due to a lack of documentation, they will never be able to obtain a home loan through a traditional bank, which they believe is the only method to obtain financing for the purchase of a property. They are unaware that Affordable Housing Financial Institutions such as Home First Finance Company may assist them and enable them to realize their ambitions.

The myth is that the bank’s typical practice comprises gathering numerous documents from the borrower to ensure that they are capable of repaying the money they are borrowing.

Debunking the myth, institutions such as NBFCs (Non-Bank Financial Institutions) are made available to specific segments of society. Such organizations make loans without requiring any proof of income.

‘Home Loans without Documents’ denotes that the borrower lacks asset, income, or employment verification.

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How Do Lenders Determine Home Loan Interest Rate?

Home loan interest rate is defined as the rate of percentage of the principal amount charged by home loan lender. The home loan amount is determined by the interest rate charged by banks and non-financial institutions. The interest rate charged determines how much you must pay your lender each month against your loan. Interest rates are typically linked to the repo rate and vary by lender.

Home loan interest rates differ in every financial institution. It also vary from person to person. A very small change in the home loan interest rate can lead to an immense increase in overall interest paid.

When you apply for a home loan, you’re essentially borrowing money from a lender, who charges you interest in exchange for financing your purchase. Think of this interest rate as the “rent” you pay for using their money. You repay both the borrowed amount (principal) and the accumulated interest through fixed monthly installments called EMIs over the loan term. Several factors influence this interest rate, and understanding them before applying can put you in a stronger position.

Factors that Determine Home Loan Interest Rates

Repo Rate

Repo Rate is the interest rate at which the Reserve Bank of India lends money to other banks. Naturally, the lower the lease rate at which banks obtain their loan, the lower the rate a customer pays. As a result, the lower the repo rate, the lower the interest rate for end users.

Reverse Repo Rate

This is the inverse of ‘Repo Rate.’ At this rate, banks lend to the Reserve Bank of India. If the Reverse Repo Rate is high, banks are eager to lend to the RBI. This means that the bank will profit handsomely, which will be passed on to customers in the form of lower interest rates.

Credit Score

When you apply for a home loan, the bank will always check your credit score. This informs the bank of your creditworthiness and allows them to determine whether you are a high-risk borrower or not. The better your credit score, the lower your home loan interest rate. Factors like on-time payments, credit history length, and total debt all contribute to your credit score.

Prime Lending Rate (PLR) 

PLR is the interest rate reference rate that banks use to determine interest rates on various products. Many banks state interest rates in the format shown below. PLR + 0.5%. In this case, if a bank’s PLR is 8%, the interest rate on their housing loan would be 8.50%.

Cash Reserve Ratio (CRR)

CRR is the minimum percentage of total customer deposits that the bank must hold as reserves. This can be in cash or in the form of deposits with the RBI. Higher the CRR, the higher the interest rate paid by the customer. This is because an increase in CRR reduces the amount of liquidity in the system.

Statutory Liquidity Ratio (SLR)

The SLR is the reserve required of commercial banks. SLR can be kept in the form of gold, government securities, and so on. A bank can only offer credit to its customers after the SLR has been met.

Benchmark Prime Lending Rate (BPLR)

The BPLR is the interest rate at which a bank lends to its customers. RBI replaced the BPLR because banks frequently loaned money at extremely low interest rates. With this in place, no bank will be able to lend below the BPLR. This can have a visible impact on the interest rate that a bank offers a customer. The greater the BPLR, the greater the interest rate that a customer must pay.

Tips to reduce Home Loan Interest Rates

Here are a few tips to reduce home loan interest rates:

Chose Short Home Loan Tenure

The length of your home loan tenure is a critical decision. While longer tenures offer lower EMIs, they come at the cost of higher overall interest paid. Weigh your options carefully before deciding.

Make More Down Payment

A methodical approach to purchasing a home will be advantageous. You can work toward a larger down payment and then reap the benefits of a smaller loan amount with a much lower interest rate.

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Know the details of home loan statement.

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Home Loan in Guntur

Guntur is the second-largest and third most populous city of Andhra Pradesh. It is a municipal corporation and hence the administrative headquarters of the District of Guntur. The town of Guntur is renowned for its business, e-commerce industry, education, and agriculture. This city, today, offers most of the people good housing options and allows them to satisfy their dream of building a home. Take the benefits of home loan from Home First Finance Company which offer home loan in Guntur with 48 hours sanctions and hassle-free process.

Home First Finance Company India is a Housing Finance Company which offers home loan in Guntur with 48 hours sanctions and hassle-free process. Most of our customers are first time home buyers and we empower them to live better! Loan amounts for these homes typically range between 5 lakhs to 50 lakh Rupees.

https://www.youtube.com/embed/M95sofuNrOQ?feature=oembedHome Loan in Guntur Made Easy

Why HomeFirst home loan a good option for you?

Loan enhancement

Have an unexpected expense, or has the property value increased? Don’t worry, because we will add on the extra amount to your existing loan.

Auto-Prepay

This feature facilitates pre-payments in addition to EMI with no pre-payment charge for existing customers.

View All Our Features

Contact Us:

1st floor, Shri Sainath Complex(DSR Complex), 15/1 Arundelpet, Guntur, Andhra Pradesh-522002.

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How to Apply For PMAY-2.0 Online

The Pradhan Mantri Awas Yojana- Urban 2.0 (PMAY-U 2.0) is a government initiative to provide affordable housing to one crore urban families. With this scheme, the government aims to improve the quality of life for all citizens and also address the housing needs of economically weaker sections and middle-income groups. Under this scheme, 118.64 lakh houses are already sanctioned.

Do you qualify for PMAY 2.0?

To check if you qualify for PMAY 2.0, you’ll need to consider a few key factors:

Check for your Income: Firstly, check the category for which you can avail the benefits. There are three income categories for which PMAY-U 2.0 benefits are available. In the table below, you can check your income eligibility.

EWS-Less than ₹3,00,000

LIG-₹3,00,000-₹6,00,000

MIG-₹6,00,000-₹9,00,000

Home Ownership: You or your family should not have a pucca house anywhere in India.

List of Documents Required

Applicant’s Aadhar Details: To verify identity

Aadhar Details of Family Members: To verify identity

Active Bank Account Details: For receiving the benefit amount

Income Proof: Salary slips or ITR returns

Caste Certificate (If you belong to SC, ST or OBC): Issued by a competent authority

Land Document (If you are applying for BLC vertical)

Applying for PMAY 2.0 Online

The Pradhan Mantri Awas Yojana (PMAY) 2.0 scheme provides financial assistance to eligible individuals for purchasing a home. Here’s a step-by-step guide to applying for the benefits under the scheme online: 

Visit the PMAY-U website: Go to the official website of PMAY-U at https://pmay-urban.gov.in/.

Review the Scheme Guidelines: Familiarize yourself with the eligibility criteria and other details mentioned in the PMAY 2.0 Scheme Guidelines.

Navigate to the Application Page: Locate and select the option to “Apply for PMAY-U 2.0” on the website.

Proceed with the Application: You’ll be directed to a page with various options. Choose “Apply for PMAY-U 2.0” again to proceed.

Review Application Instructions: A page opens with “Instructions for the User”. Carefully read the instructions provided on the application page. Scroll down and select Click to Proceed.

Ensure Document Availability: A page opens with Documents Required. Verify that you have all the necessary documents required for the application process before proceeding further. Scroll down and click on Proceed.

Eligibility Check: Enter your basic information, such as your state of property, and other details on the designated page. Click on “Eligibility Check” once you’ve filled in all the required fields. After you fill in all the fields, click on Eligibility Check.

Aadhaar Authentication: A page opens with Consent for Aadhar Authentication. Provide your name and Aadhaar number to initiate the Aadhaar authentication process. Enter the OTP you receive on your Aadhaar-linked mobile number.

Complete Beneficiary Survey: After this, you’ll be presented with a beneficiary survey form. This form will typically collect information on personal details, family members, household details, address details, home loan details (if applicable), and other relevant information. Submit the completed form to receive your application number.