Home loans are a great way to achieve your dream of a home. But the associated EMI could be more manageable. The home loan rates seem huge and feel like a burden. Efficient financial management, thorough research, and awareness can save you from displeasure. Maintain the enjoyment of owning a home and repay the loan without dreading it. The key is to plan your future finances, considering your budget, loan, and expenses. Use a home loan calculator for the endeavor. Remember to follow the steps outlined above in order to save money and feel accomplished and satisfied with your actions. Before further delay, let’s get into the details of your desired savings.Â
- Timely Repayment
Missing out or late payments will cost you financially, adding to the burden. So ensure you catch it by focusing on the root causes. The inability to timely pay the EMI can be due to financial mismanagement. Work out the situation by giving time to restructure the finances and expenditures. Avoid the excess penalty burden and save your credit score by reanalysis.
- Automatic Repayment
The other reason leading to missed or late payments can be forgetting the dates. In the mentioned scenario, set the reminders or automatic payments from the bank account. While scheduling auto-payments, be very particular about the balance credit in your account three days before the debit date. It will further save you from EMI bounce and an additional penalty.
- Loan Transfer
After a certain period of unmissed loan payments, applicants are eligible for a home loan transfer. Look out for the low-interest rates and carefully perform a cost-benefit analysis. Include the remaining tenure, charges of home loan transfer, and benefits. Use the home loan calculator to find the lowest suitable home loan rates. Check all the offered benefits.
- Switch to MCLR
MCLR is an acronym for Marginal Cost Funds Based Lending Rate. Home loans sanctioned after April 2016 do not affect the change in interest rates on existing borrowers. However, the loans sanctioned before April 2016 need not follow the rule. Be aware of this fact for better decisions.
- Decrease the Loan Tenure
The prime fact is lesser EMIs are associated with less tax. So if there is room to shorten the EMI without creating a burden on the finances and expenses, avail it in the first go. Remember to have a good credit score to be eligible for the offer.
- Follow Part Payment
Utilize the bonus, extra income, and commissions to reduce the loan amount, EMI, and tax. Before moving and taking a home loan, ensure you know about the part payment fee, which applies to your provider. Analyze the overall benefit of taxes and lowering of EMI. Besides a lump sum of part payments, applicants can also opt for additional EMI payments. The section requires utilizing the money to clear up extra EMIs, ultimately reducing the interest and tenure.
- Increase Downpayment
The ultimate aim is to reduce the principal amount resulting in lesser interest. Paying off the highest possible down payment will begin with low interest. Coupling the step with other tax-saving steps will further help you save loads.
- Consolidate Your Debt
Get another loan to pay off the previous loan. It may sound not easy and require extra payment, but contrarily, practically, it does not. Choose the low-interest personal loan available at longer tenure by merging the existing loans. It will help to pay off the loan quickly.
Conclusion
Home loans are the problem solvers but are often considered long-term problem creators. Mindfully using the offers and available options by being aware of them helps a lot. Besides knowing, ensure to act and utilize them for your benefit. Connect the loan providers and compare the different home loan rates. Use the home loan calculator to find the leading lowest EMI in the shortest tenure. Go for the options according to your circumstances and later act smartly to reduce the taxes.
