Current Interest Rate Scenario – Know How to Manage Home Loan?
The Reserve Bank of India (RBI) has recently announced a hike in the repo rate and with several banks also increasing their MCLR, borrowers are a bit concerned. They are thinking as to how they can manage their home loans.
If you are one of such borrowers who are willing to opt for the lowest home loan interest rate or simply looking to manage your home loan, here are some tips to help you out.
Tips to Help You Breeze through the Home Loan Repayment Process
Pay a Higher EMI if You can Afford
Paying an EMI more than what you need to pay is one of the smartest things to repay the home loan before the end of the tenor.
If you pay a slightly higher EMI (more than Rs.2000-4000), you can easily save a number of months from your loan tenor.
To be able to increase the EMI amount, the home loan borrower should invest his/her money smartly to generate enough funds and enhance his/her equity.
Manage your Loans
While dealing with loans and investments, the major objective is to maximize cash flows. For this, you can compare your monthly returns and monthly payments on investments.
If you see that one of your investments are not giving you enough returns, you can close those and put down a higher EMI amount for the amount received against those.
You can also look to put money in investments that can offer you ROI worth 12-15%. As a result, it will help you get more income which in turn, can help you put down higher loan EMIs and pay off the loan quickly.
Opt for Making Some Part Prepayment
The longer you will take to make prepayments towards your home loans, you will have to bear more interest.
Part prepayment is an effective way to bring down the loan principal and reduce the loan obligation.
Nowadays, most of the online lenders do not charge a penny for making prepayments towards the home loans.
Thus, consider it as a weapon to manage your home loans without issues.
Opt for the Home Loan Balance Transfer
To help you pay off your home loans quick and save on the home loan interest rate, you can also opt for the home loan transfer facility.
The home loan balance transfer helps you by letting you switch your home loan account from one lender to another and enjoy a lower rate.
The existing lender charges some amount for letting you do that. Your new lender also offers a top up loan facility to help you borrow up to Rs.50 lakh at a lower rate and extended tenor so that you can cover other needs in life.
Use Online Home Loan Calculators
Lenders have made some digital home loan calculators such as home loan EMI calculator, home loan eligibility calculators and more.
By using these calculators, you can know your home loan EMI and eligibility in advance even before applying for the loan.
Like this, when you will be knowing these vital parameters beforehand, you will manage your finances so that you can arrangements for the loan’s repayment.
The Bottom Line
Some of the major tips to help manage your home loans and managing lowest housing loan interest is revealed. You can go ahead and implement these tips and work towards affordable home loans. All the best!
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Category: Loans
