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Three Ways To Reduce Home Loan Burden
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Owning a home is a dream come true for millions. But before booking a home, it is advisable to chalk out a plan to reduce burden while repaying your home loan. Equated Monthly Installment EMI, the rate of interest ROI and tenure play a significant role during home loan repayment. If these are not kept in mind, there can be an excess burden of repayment on a borrower. For home buyers, here are three ways to reduce home loan burden.
Prepay Early:
Prepayment is an effective way to reduce home loan burden. Home loan borrowers can save interest if prepayment is started from the first year of a home loan. Prepaying at later stages does not save much interest on a home loan. It must be noted that there are no prepayment charges for home loans which have floating ROI. Also, the prepayment amount should be equivalent to at least two EMIs.
Pay More Than Your EMI:
If a lender increases the rate of interest on a home loan, then it is better for a customer to increase his EMI amount. This way borrower can reduce his total interest payment in the long duration. To effectively manage EMI of home loan, a borrower should keep it less than 50% of his/her monthly income. This way customer can increase EMI when needed without any pressure. Stepping up EMI helps to reduce loan tenure since higher EMI results in fast loan repayment.
Time Your EMI Well:
The timing of EMI plays a significant role in reducing the burden of home loan. Instead of paying towards the middle or end of the month, it is advised to pay EMI near salary date. This way borrowers can escape any additional charges that may arise due to non-payment of dues.
For borrowers looking to manage their home loan repayment, the above tips can significantly reduce burden loan burden. Besides this, it is always better to do a market research and choose the right home loan partner. IIFL Home Finance Ltd. provides home loan facility to customers at attractive interest rates and affordable EMIs.
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Disclaimer: The information contained in this post is for general information purposes only. IIFL Home Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment, etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness, or of the results, etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability, and fitness for a particular purpose. Given the changing nature of laws, rules, and regulations, there may be delays, omissions, or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan product specifications and information that may be stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan.
