Manage your Home Loan EMI Repayment
After taking a home loan, individuals stay engaged in this financial obligation for a long haul. So, they should have a proper plan so that their home loan EMI payment does not become a stressful affair for them. In this regard, they can resort to some effective strategies that they should integrate to manage their loan repayment comfortably.
Roadmap to manage home loan EMI payment
Individuals must have a proper plan for conveniently paying their monthly instalments even before taking a home loan. This will help them repay their dues without making it burdensome. So, understand the following EMI repayment plan to settle the loan balance with lenders comfortably:
Making a substantial down payment
Individuals should make a higher down payment while taking a housing loan. In other words, they should invest as much money in constructing their house as possible. It can give them manifold benefits as mentioned below:
- They can negotiate with their lenders for a lower interest rate as their total debt is comparatively low.
- The interest component will be lower as the interest rate will be applicable on a lower loan principal.
- They will get a lower monthly instalment amount.
This way, by investing a higher sum, borrowers will reduce much of their stress in the first place.
Further, Individuals should know how to calculate home loan EMI amount through online home loan calculator. This will help them understand the sum of instalment, interest outgo amount, the total cost of borrowing etc.
Opting for part prepayment
Another easy way to manage a housing loan burden is through part prepayments if borrowers have surplus money at a time during the tenor. It will help them reduce either their EMI amounts or loan tenor. Nevertheless, they must not opt for this at the stake of their financial stability. Furthermore, there are some important factors they need to keep in mind when prepaying home loans.
Seeking home loan balance transfer
Individuals must also opt for transferring their outstanding home loan balance. In this process, borrowers have to switch their current loan account to another lending institution to grab their special offers. So, individuals need to wait for additional benefits like lower interest rates and add-on loan facilities of other lenders. They also should be aware of when they should consider a home loan balance transfer to get maximum benefits.
Additionally, individuals must keep all home loan documents handy to complete this balance transfer faster.
Creating a contingency fund
Apart from part prepayment, borrowers can also maintain a contingency fund with excess liquidity. It will help them pay their EMIs even during a liquidity shortage. This way, individuals can keep a healthy CIBIL score despite unfavourable economic conditions for a period. For this, they should allocate money for this fund at regular intervals after lenders disburse the home loan amount.
Assessing income to select loan tenor
A shorter loan tenor is always a desirable option for the borrowers. This reduces the interest outgo, and they can also get rid of their financial burden faster. However, a lower loan tenor increases the instalment amounts. Therefore, borrowers should be careful about this factor while applying for a home loan. They must know how much EMI amount will be easily payable for them before choosing this tenor. This way, they can settle their EMIs without difficulty.
Apart from this, several lenders facilitate pre-approved offers on their financial products, such as home loans and loans against property. Individuals can expedite their application process by leveraging this service. They need to write their names and contact details to check their pre-approved offers.
In conclusion, borrowers can include these aspects of a home loan EMI payment plan to settle all their dues timely and easily. Moreover, it will reduce the chances of missing any of their EMIs. Thus, they can substantially enhance their CIBIL score, which will help them get loans in future more easily.