Few Ways to Manage Home Loan EMI in Better Manner
Repaying a housing loan is a lengthy obligation, so planning it in advance will help you manage the process better and allow you more flexibility through its tenor. This must not be limited to setting aside funds for each EMI. Take your repayment a step further by using these smart tips to manage your Home Loan EMIs.
Choose Bigger EMIs Based on your Financial Standing
It is always better to consider bigger EMIs, especially if you can afford the same. While it can look a little steep at the beginning, choosing this will allow you to bring down the tenor. So, you can pay off your housing loan faster. This, in turn, means that you will be spending less on interest payments. Thus, to save money and become debt-free faster, opt for bigger EMIs. Consider your monthly cash outflow and budget to fix the EMI amount with your lender. Use a Home Loan EMI calculator to check your EMIs in advance and then apply for a housing loan based on the parameters. You can also increase your EMIs every year to coincide with the increase in your salary or other income.
Make Part-prepayment Whenever You have Excess Funds in Hand
You may be tempted to spend excess funds in going for a vacation or buy a new car. While these short-term personal goals are important, you can utilise funds from your bonus or matured investments for these purposes. When you get money from rental income or on the sale of your old car, it is better to use them to make a part-prepayment towards your housing loan. Remember, with every part-payment, you are able to bring down your loan obligation. This reduces your interest liability and helps you service your loan faster.
Opt for Affordability by Carrying Out a Home Loan Balance Transfer
Due to economic reasons and RBI mandates, the interest rates on housing loans can alter year-on-year. Even though you may have taken a loan on a nominal interest, after several years and with economic shifts, you may find the interest to be a little higher than the market rates. So, check new offers and Home Loan rates with lenders and in order to avail lower interest, choose a balance transfer on your housing loan. You can complete the transfer with lenders such as Bajaj Finserv who will switch your existing Home Loan into a nominal interest loan with the Easy Home Loan Balance Transfer Facility. You can get the transfer done on minimal documentation and access a longer tenor of up to 25 years for easy loan repayment. As additional benefits on your transfer, you may also get an affordable top-up loan and a 3-EMI holiday.
Maintain Regularity with EMI Payments
In order to repay your housing loan faster and to boost your credit score, it is important that you do not miss EMI payments. Set up a periodic reminder so that you never forget paying your EMIs on time or simply choose ECS and allow the EMIs to get deducted from your bank account every month. Choosing ECS gives you enough room to prepare for your EMI payment a few days before it is due, as the bank and your lender will send you reminders to keep your account funded sufficiently.
Streamline your Home Loan repayment using the methods suggested above and become debt-free faster. Getting rid of debt will allow you enough room to save your earnings in a variety of ways, which will work as a shield to safeguard you with future fund requirements.
About the author
Anamika Verma writes various types of tutorial related to finance and has a vast experience as a financial advisor. Her expertise on financial issues is well sought after and she is known for her in-depth knowledge topics such as loan, fund. house finance. She has written more than 1000 blogs on topics related to house, home, home improvement and much more. A post-graduate in finance management, Anamika loves to travel or cook in her free time.