14 DECEMBER, 2021

When you avail a home loan, you can opt for a tenure that you are comfortable with and repay it in easy instalments. These instalments are known as EMI (equated monthly instalments), and are dependent on three key factors: loan amount, tenure and interest rate. While you can choose your loan amount and tenure, the lender determines the interest rates. Therefore, you must choose a lender that offers lowest interest rates on home loans.

If you are looking for the lowest home loan interest rate, your search ends at Kotak Mahindra Bank. While the interest rate that you get on your loan depends significantly on your financial profile, here are a few ways through which you can reduce your interest rates and get an affordable EMI.

  • Maintain a high credit score

Your credit score helps lenders judge your creditworthiness and reliability. Therefore, having a high credit score indicates that you are creditworthy, and it is not risky to lend you money. Having a credit score of 700 and above can help you get a low home loan interest rate. You must apply for a loan with a high credit score and maintain it throughout your tenure.

  • Negotiate with the lender

You can get a low interest rate on a home loan if you can negotiate well with the lender. You can leverage your high credit score and strong financial profile to negotiate with the lender for the interest rates. If you have bank accounts with the lender, you can also leverage your good relationship to negotiate.

  • Clear your debts

Having several debts and credit obligations can lower your credit score. You must pay your dues timely and clear your existing debts if you want low interest rates. Having too many loan EMIs and dues can increase the chances of you defaulting on EMI payments. In such a case, the lender can charge a higher interest rate on your loan.

  • Opt for a joint home loan

Having a co-applicant can increase your eligibility and thus help you get lower interest rates. The lender clubs the credit score and income of all the co-applicants to determine the eligibility. You have a higher chance of getting lower interest rates on joint home loans due to higher eligibility.

  • Transfer your home loan

You can get lower interest rates by transferring your loan. If you have a good credit score, you can switch your home loan to a lender offering lower interest rates than the one you are servicing. However, before doing so, you must do a cost-benefit analysis to calculate the savings. Moreover, opting for government housing schemes and paying higher down payment can also help you get lower loan interest rates.

Housing loan interest rates can significantly impact your cost of borrowing. Therefore, you must maintain a robust financial profile to get the lowest loan interest rates. You must maintain a high credit score, stay clear of defaults and enhance your creditworthiness with a joint home loan.

So, what are you waiting for? Visit our website and apply for home loan at competitive interest rates, today.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.