Make regular prepayments

Regular prepayments are a surefire way to ensure your overall interest rate is reduced. EMI payments consist of two parts – interest charged on the amount borrowed and the principal.

In the early stages of your loan, you pay more in interest than principal. If you receive a promotion, bonus, or raise, you can use it to make an advance payment. This reduces the amount of capital and thus interest.

If you don't think you're getting favorable terms from your existing lender, the first step is to contact your existing lender to lower your interest rate. Most lenders will try to keep their good customers and probably do. You can ask the bank to match a competitor's interest rate, or you can ask them to lower your interest rate based on your credit history.