Home loan is a loan which can be used for the purchase of a house, construction, repairs or renovation of your existing house. However opting for a home loan is not an easy task, it is the biggest financial commitment that one can make in his life because the tenure of the home loan goes up to 30 years. Purchasing or building a home is a huge undertaking as it is required lots of investment. Many Banks and Non-Banking Financing companies (NBFCs) are offering home loan at the best rate of interest. In recent years, demand for a home loan has increased a lot. Many individuals have a different expectation when they apply for a home loan due to this lot of banks have different types of new home loan schemes. Before applying for a home loan, an individual must have complete knowledge regarding loan like interest rate, processing fees. Many of us are not aware of some hidden charges which banks and NBFCs charged at the time of providing a home loan so you should know about that charges. You must also know how to Calculate Your Home Loan EMIs because paying EMIs on time is very important.
Smart ways to manage your home loan EMIs are:
Try to pay higher EMIs
Paying higher EMIs can help you to manage your home loan better. Paying high monthly EMIs can help you to reduce your loan tenure and a result the total interest you will suppose to pay the lender also goes down. With the reducing of repayment tenure, later you will get enough time later to focus on other important things in life. So, by opting to pay more EMI every month helps in reducing your financial burden.
Home loan buyers have the option to prepay the entire or part of the outstanding amount. Prepayment of home loan helps in reducing the principal amount as well as the interest rate. So, whenever you have surplus money try to make the prepayment of your home loan.
Go for a lower interest rate
Always try to monitor the trends in interest rate so that if there is any dip in interest rate, you can think about switching to a lower rate of interest. Banks generally reduce their rates at different times. You should be aware of the trends of the market and switch to a lower interest rate
Never miss EMIs
You should always try to pay all your EMIs on time. Missing EMIs may also affect your credit score which can create a problem for you in future at the time of taking any loan or card.
Try to pay a Lump sum
Salaried employees receive annual bonuses which can be used to pay a lump sum amount. This will help in not only saving the rate of interest but also in repaying the home loan faster. Paying a lump sum amount helps you manage your home loan better.
So, these are the way which helps in reducing home loan EMIs.
Additional Reading:- Reasons Why Home Loan Balance Transfer Is a Good Idea