Owning a house is a dream for many, and home loans are the best financial tool that helps one live their dreams. But in the rush and excitement of buying a new home, many end up making mistakes. These include opting for the wrong lender, inappropriate planning, avoiding usage of eligibility and home loan calculator, or agreeing to some terms and conditions that are not suitable.
This causes a lot of financial stress. If you want to make house loan borrowing a joyful ride, the following tips will help to manage the loan as pro –
Paying off a housing loan is a massive commitment, and you need to manage your finances well for achieving the same. For this, you require good management skills and some financial awareness. The steps for better management include –
- Make a budget
- Stick to it every month
- Have proper investment plans
- Try saving more
- Wait for offers and discounts
- Track your spending
If you have invested somewhere that makes you pay unnecessarily without any profit, you should first close the investments and focus on paying the loan.
Higher EMIs could sound scary, but this helps you exhaust the loan quickly. The other thing to know is that lower EMIs, means you end up paying more towards the end of the term. So, be accurate and have proper plans while using the home loan EMI calculator. By doing so, you are aware of your EMIs beforehand, and it also tells you how much you will pay at the end of the duration. Accordingly, plan your EMIs and finances.
It does not help paying lower EMIs; this is because you benefit only by paying more EMIs and saving interests.
Pre and part payments
Although there are low home loan interest rates available, it does end up consuming double of what you borrowed. So, it is better to exhaust the loans quickly. For this, you need to make partial or pre-payments whenever you have enough funds. Instead of following the usual EMI payment process, making lumpsum payment when you get a bonus or incentives helps you. You can also do so when any investment of your matures.
Check the same using the EMI calculator for home loan. It should give you a clear picture of how much amount you can prepay.
Balance transfer or refinancing
A balance transfer is when you move the outstanding amount to a new lender to receive lower interest rates, better terms, or flexible loan options. This is also the best means of reducing EMIs. But while the whole transfer process, you need to use the housing loan EMI calculator again for checking the new EMI amount. If the borrower finds the existing loan tenure high and finds a lender offering lower interest rates, they can reduce the EMI greatly while doing a balance transfer.
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