Home loans allow you to have access to instant funds so that you can build or buy your own home house. The funds are considerable in amount since real estate does not come cheap. Since the loan quantum is high, the repayment tenure is long so that you can pay off the loan easily over a period of time. However, longer repayment tenures also involve higher interest payments and so it is advised that you should pay off your home loan as quickly as possible. What about the EMIs? If you reduce the repayment tenure, the EMIs would increase and might become unaffordable. So, how can you repay your home loans easily and quickly?
Here are some easy loan repayment options which you can explore without pinching your pockets –
Choose an affordable EMI when availing the loan
The first and the most important fact which you should not ignore is that your home loan EMI should be affordable on your pockets. When you are availing a home loan, use a home loan EMI calculators to calculate the most suitable EMI which would be easy to pay without any financial difficulty. If the EMIs are affordable you can avoid defaults and the interest build-up which results from such defaults.
Increase the EMI if your income increases
Increasing the EMIs at the same level of income would be a mistake since higher loan repayments would become unaffordable. However, when your income rises, you should try and increase your home loan EMIs too. As the EMIs are increased, the loan burden would be paid off faster and you would become debt-free.
Prepay the loan if you have surplus funds
When you get a bonus or any of your investment matures or you come to have surplus funds, don’t waste the funds on unnecessary expenses. Prepay your home loan with such funds to bring down your loan burden. Prepayment means paying a portion of your home loan in advance. Home loans allow prepayment facilities and this prepayment reduces the outstanding balance of your loan. As the outstanding loan reduces you would be able to pay off your loan in a shorter period of time.
Refinance the loan
Home loans allow balance transfer facilities wherein you can transfer an existing home loan from one lender to another lender. This facility is called home loan transfer or refinancing of the loan. Refinancing or transfer is usually done when you find a lower rate of interest or better loan related terms and conditions with another lender. You can, then, inform your existing lender and transfer the balance of your loan to another lender to enjoy lower rates or better loan terms. If you find lower interest rates, choose to refinance your loan. When you do so the EMIs would reduce as you would save on interest payments. This saving can then be utilized to increase the EMIs to repay the loan quicker.
So, you can use any one or more of these above-mentioned ways to repay your home loan faster. Each of these ways ensures that quick repayment of your loan does not cause a financial strain. So, what are you waiting for? Get debt free as soon as you can.
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