4 Things To Do After a Home Loan Interest Rate Hike
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4 essential steps that every person with a home loan needs to take when there is hike in the home loan interest rates.
Welcome to FundooMoney, your 24X7 buddy on all your money matters! A rise in the interest rate for your home loan makes a huge dent on your monthly budget thanks to higher home loan EMIs. How do you deal with such a situation? Coming up, an action plan for such situations!
When your home loan EMI increases thanks to an increase in the home loan rate, you might want to make a temporary adjustment to your monthly budget. But if there are sustained increases over time, you need to take the following steps.
Check if a cheaper alternative exists
Find out if there are other home loan providers offering home loans at much lower rate to new borrowers. There is often some difference in the interest rate offered to existing and new borrowers by different home loan providers.
Explore home loan refinance options
If another home loan provider offers you a loan at a lower interest rate and the difference is 0.5 percentage points or more, consider taking your home loan to the new lender.
Consider increasing the EMI instead of a longer tenure
If you are without any lower cost alternative, prepare your budget for a higher EMI. Avoid increasing the home loan tenure, as many more months or years, could get added than you anticipate. Remember, you need to repay all loans well before retirement.
Extend loan tenure as a last resort
If your home budget has no scope for accommodating a higher EMI, request the home loan provider for an extension of the loan tenure. However, ensure that with pay hikes, you subsequently increase your home loan EMI.
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