Summary – One of the top priorities for home loan borrowers is to repay the amount as quickly as possible. In this article, we provide you valuable tips to help you repay the loan faster without making you feel the pinch.
Buying a new home is probably the biggest asset that a vast majority of Indians can afford in their lifetime. Today, whilst it has become easier for people to avail home loans, people still find it hard to repay their loans on time. If you are looking to apply for a home loan anytime in the near future, you can use the following tips to reduce the burden or repayment.
Go for a higher deposit upfront
While applying for a home loan, it is best advised that you allocate maximum amount of money that you can afford to pay towards the loan for the deposit amount. The higher the deposit, the better it is for you. What it actually does is, it reduces your actual loan amount, which in turn greatly helps in reducing the EMI amount. The deposit amount is nothing but the down payment you make; try to pay the maximum amount upfront.
Use the different tools
When it comes to applying for a home loan, meticulous planning is vital. There are plenty of tools like the EMI loan calculator that you can use to your advantage. Carefully assess your financial situation and then use the calculator to figure out the maximum amount you can afford to pay as EMI. The tool is really easy to use, you simply have to enter the details like your loan amount, the duration of the loan and the interest rate and the tool will calculate your exact EMI amount.
Look for an offer with low interest rate
All loans are supposed to be repaid with interest to the lender. While you can’t do away with the interest, you can certainly look for an offer with a lower interest rate. Remember, the EMI amount is inclusive of both the principal and the interest amount. So any discount on the interest can lead to a significant saving in the long run. Take your time in assessing the offers of different lenders and choose the one that best suits your needs. You can consider appointing a broker or a mortgage originator to negotiate with the lender and get the lowest possible interest rate.
Try to pay extra
One of the easiest ways to reduce the burden of loan repayment is to pay a little extra each month. Even if it is a small amount it would make a whole lot of difference in the long run.
Use the additional income to pay off the loan
Even if you are paying off your home loan without any defaults it is advisable that you focus on repaying the loan efficiently and quickly. Every time you earn an additional income like the dividends on your bonds or the interest earned from your fixed deposit, use the additional income to pay off the loan.
Reduce your expenses
During the monthly budget try to find out the areas where you are spending the most and see if you can cut down on the expenses. Even a little savings can go a long way in reducing the burden of your home loan repayment.