If you are buying a house for the first time, you know the significance of buying it. Especially, when you have spent years living in a rented apartment. The joy of owning a house cannot be acquired in a rented property, thus, owning a house is utmost important. Although, owning a house has been a basic need since the past, purchasing a housing property can still be hard for many people.
During this situation, availing a Home Loan can rescue you. Many financial institutions offer Home Loans as a financial help to property investors. When availing a loan, many people are often intimidated with the interest rates that are charged over it. However, there is no such thing to be worried about. If the Home Loan is well planned, the EMIs can be well managed.
Here are some tips on how you can manage your Home Loan EMI repayment:
- Availability of low interest rates:
Talking about Home Loans, interest rates is the most important factor to consider. It is important to know, that different financial institutions charge a different interest rate. Some lenders charge a high rate of interest, whereas, some charge a low interest rate. As this is the situation, it is essential that you compare the lenders as well as the Home Loan rates offered by them and then apply for the loan. Availing a low Home Loan rate can benefit you by reducing your financial stress. Also, the loan repayment amount will fit your pocket.
- Short-term loan tenor:
While calculating your Home Loan EMI, the tenor that you choose plays a very important role. The lender offers you two options to choose from: long-term loan tenor and short-term loan tenor. People usually tend to choose the long-term loan tenor as they can pay a lesser EMI amount. But what they don’t realise is, that they increase their debt period, which at times can get difficult to manage. Whereas, if you choose a short-term loan tenor – though you have to pay a higher EMI amount the debt period will be less as well as you can get rid of the loan quickly.
- Down payment:
Besides implementing the above tips, there is one more thing which you can do to manage your Home Loan repayments. You can pay a huge down payment. At the time, you might come across some lenders who ask for a down payment ranging around 15% to 20%. If not so, then you can go for paying a high down payment. Furthermore, this will help you reduce your equated monthly instalment amount. Although this can reduce your EMI amount, the lender won’t allow you to pay a down payment which will reduce your EMI by 40%.
- Prepay Home Loans:
You can also go for a loan prepayment if you have some surplus funds in hand. In case if you have some extra funds coming from a business profit or a salary hike then you can use those funds to prepay your loan amount. For that, you can use online Home Loan part pre-payment calculator which is usually available on lender website to get an approximate idea. Thus, this will help you to reduce your EMI amount.
By using these tips, you can manage your Home Loan EMI repayment. By following the above tips, you will not only reduce your EMI amount, but you can also reduce your financial burden by repaying the loan faster.