How To Repay Home Loan Faster
Home is where the heart is. This saying is so true, especially when you toil hard to buy your own home. Your heart goes out to love the home...
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Home is where the heart is. This saying is so true, especially when you toil hard to buy your own home. Your heart goes out to love the home of your dreams. Saving is a crucial step in attaining a home loan. If you use a home loan eligibility calculator, you can determine the chances of acquiring a loan. However, once acquired, repaying a heavy home loan can be a nightmare when you realize that a huge portion of your income goes away in the EMI for your home loan. Don’t let this nightmare scare you for long. Here are some tips to help you repay your home loan faster.
Opt for a higher EMI
This may be difficult for you initially, but once you carefully calculate your expenditure and make certain cuts in your lifestyle, you will be able to squeeze out another Rs.10000 to Rs.20000 a month to clear off your loan faster. When you purchase a home loan online, you can use an EMI calculator which will allow you to appropriately forecast your EMI payments.
Smart fund management
It is very critical to manage your cash inflow and outflow when you have a huge loan to repay. Take stock of your investments and check which ones are giving you good returns. If you have some funds that can be used towards the repayment of your loan, it is a good idea to liquidate them and use it up for the loan instead of bearing the burden of the EMI directly from your salary.
Make use of EMI calculator
This tool must be used even before you decide to take a home loan. There are several mortgage calculator tools that can help you understand how much EMI you can sustain depending upon your income. Carefully calculate all your expenses and then see how much you can spare to pay the loan installments. This is where the next point comes to play.
Compare the interest rates of different banks
Though all banks give a rosy picture to avail a home loan, there are banks that come with lower interest rates, other advantages, or perks. Weigh each option carefully to see which offer suits you the best. If it is just lower interest that you are looking for, opt for the bank that offers the lowest interest.
Always pay your installments on time
In case you fail to pay your EMI on time, unnecessary yet heavy fines are levied for most loans and this can add to your burden for repayment, leave alone the adverse effect it will have on your credit score. The more prompt you are in paying your installments, the better chances of you repaying the home loan within the stipulated period without any fines.
Take advantage of partial prepayment
If it is an option with your bank, a really good way to repay your home loan faster, is to opt for a prepayment. If you can arrange for extra funds by selling a certain property that will not yield huge amounts in the future, or sell your stocks for some substantial cash, go for partial prepayment to make your home your own sooner.
Make use of annual bonus
You can postpone a foreign vacation or the gorgeous diamond set that you have been waiting to buy after you have the annual bonus credited to your account. Instead, you can use the extra money to pay off your loan installments without impacting your salary for a few months.
Save with every salary increment
Your home loan tenure maybe ten, fifteen or even twenty years. But the good news is that, during this tenure, your salary will also keep increasing. Make use of the increment to increase the EMI amount so that you can repay your loan faster. Bulk payment towards your loan is always a good idea to reduce the tenure of repayment.
Cautious savings and careful utilization of available funds is key to repaying any loan. So be wise and choose the most convenient loan option when choosing your dream home.
Opt for a higher EMI
This may be difficult for you initially, but once you carefully calculate your expenditure and make certain cuts in your lifestyle, you will be able to squeeze out another Rs.10000 to Rs.20000 a month to clear off your loan faster. When you purchase a home loan online, you can use an EMI calculator which will allow you to appropriately forecast your EMI payments.
Smart fund management
It is very critical to manage your cash inflow and outflow when you have a huge loan to repay. Take stock of your investments and check which ones are giving you good returns. If you have some funds that can be used towards the repayment of your loan, it is a good idea to liquidate them and use it up for the loan instead of bearing the burden of the EMI directly from your salary.
Make use of EMI calculator
This tool must be used even before you decide to take a home loan. There are several mortgage calculator tools that can help you understand how much EMI you can sustain depending upon your income. Carefully calculate all your expenses and then see how much you can spare to pay the loan installments. This is where the next point comes to play.
Compare the interest rates of different banks
Though all banks give a rosy picture to avail a home loan, there are banks that come with lower interest rates, other advantages, or perks. Weigh each option carefully to see which offer suits you the best. If it is just lower interest that you are looking for, opt for the bank that offers the lowest interest.
Always pay your installments on time
In case you fail to pay your EMI on time, unnecessary yet heavy fines are levied for most loans and this can add to your burden for repayment, leave alone the adverse effect it will have on your credit score. The more prompt you are in paying your installments, the better chances of you repaying the home loan within the stipulated period without any fines.
Take advantage of partial prepayment
If it is an option with your bank, a really good way to repay your home loan faster, is to opt for a prepayment. If you can arrange for extra funds by selling a certain property that will not yield huge amounts in the future, or sell your stocks for some substantial cash, go for partial prepayment to make your home your own sooner.
Make use of annual bonus
You can postpone a foreign vacation or the gorgeous diamond set that you have been waiting to buy after you have the annual bonus credited to your account. Instead, you can use the extra money to pay off your loan installments without impacting your salary for a few months.
Save with every salary increment
Your home loan tenure maybe ten, fifteen or even twenty years. But the good news is that, during this tenure, your salary will also keep increasing. Make use of the increment to increase the EMI amount so that you can repay your loan faster. Bulk payment towards your loan is always a good idea to reduce the tenure of repayment.
Cautious savings and careful utilization of available funds is key to repaying any loan. So be wise and choose the most convenient loan option when choosing your dream home.
