Home Loan Becoming Too Much of a Burden? Here's how you can manage your loan
For most Indians owning a home is the ultimate dream, although a very costly one, something which they might not be able to fulfill using their own finances.
People fulfill their wish of owning a house by taking loans. The duration of repayment is usually longer, up to 30 years which almost covers the most important part of your life.
An unexpected turn of events like unemployment, ill-health or an accident can wreak a havoc on your financial planning. Before something worst happens, it is always wise to be prepared for such times. This article will help on how you plan for such instances and more importantly manage your home loan efficiently.
Prioritize Your Loan Repayments
You may have several debts and financial commitments. But your EMI repayment should be the priority on your check list. How hard may be your financial status, you must make sure to pay all your Loan EMIs on time.
More importance should be given to developing a good track of EMI repayment, as this will help build a good credit score.
Banks decide your future loan application based on your credit score. Any dent on your credit report can put you in trouble when you might need a loan desperately in the future.
Transfer your Home Loan to Reduce the Interest Rate
Banks do change the rates of interest on Home loans from time to time. Keep a check on the interest rates and when it becomes considerably low, switch your home loan to another bank to reduce the interest burden.
This move should be made only after doing a comprehensive cost-benefit analysis to ascertain whether a switch is good for you. Your outstanding repayment tenure should not be less than five years and reduced interest rate should be minimum of 2 percentage and above. Besides, calculate the amount of processing fee and other charges before making a move for a beneficial transfer.
More the EMI, Less the Burden
Life is best enjoyed without the burden of a long-term loan. The best way to manage your home loan is to pay as much EMI as possible. This will reduce the tenure of your repayment and the interest rate as well.
This payment will ease your financial burden sooner and will pave way for a hassle-free planning of your retirement, children's marriage, and various other important events.
Partial prepayment is another option that can reduce your loan tenure. However, check with the bank if any charges are levied for prepayment.
Endnote
Stay motivated all the time, we understand that a huge debt staring at you could be a difficult thing to put at the back of your mind. At the same time, managing debt is not a difficult thing if you have the right attitude and practice discipline in payment of monthly EMIs.
Managing debt starts from the point from the kind of loan product that you choose, getting a home loan that is right for you would help in the long run. Get the home loans that are matched to your credit profile at CreditMantri and manage your home loan debt the right way.