Do you want to avail of a home loan, or already have availed one and wish to repay faster home loan EMIs?
Yes, you can pay off your home loan faster if you can follow a few tips.
A home loan is a debt, after all, which no one wants to continue for a long time. It is because home loan EMIs affect monthly outlays for a long duration. It is a long-term obligation, and that’s why most borrowers pay it off faster.
In the same context, here is a post detailing a few smart tips to repay your housing loan in a jiffy!
Try to pay a down payment of more than 20%
A home loan down payment is the amount that a borrower needs to arrange on their own. It is because the maximum a lender funds a property’s cost is between 75-90%.
Hence, if you pay a large down payment amount exceeding 20% of the property’s cost, you are bound to borrow a lower loan amount.
Once you borrow a lower amount, your home loan interest rate outgo will also come down. In turn, your home loan EMI amount will also reduce. In short, you will be able to repay your home loan faster.
Make prepayments during the tenor
If you have already availed of a home loan, you should make prepayments during the tenor. Once you do that, your borrowable loan amount, interest rate, and payable home loan EMI will also come down. In turn, you will be able to repay your loan months or years earlier. But, before making home loan prepayments, check if your lender charges an extra amount. Today’s most modern-day banks and NBFCs don’t charge anything.
Go for a shorter tenor
Choosing a shorter tenor means that you will be able to pay the big home loan EMIs. It means that you will be able to clear your debts before the scheduled tenor. But, when you choose a smaller tenor, the increased housing loan EMI may hurt your outlays.
But you will also get to save on interest costs compared to a longer tenor. You can use the Bajaj Housing Finance Limited Home Loan EMI Calculator online. The tool will showcase an exact EMI amount over a longer and a smaller tenor. This way, you can become confident of an amount matching your repayment capacity. Hence, you will be able to go for the best-suited tenor.
Pick a lender offering you with lowest interest rates
Before you choose a lender, ensure you have an idea of the market. Yes, you should make efforts to review the offers of all creditors and compare their interest rate deals.
Once done, you should go for a lender offering you the lowest interest offer. In turn, it may ensure that your home loan EMI remains affordable and you pay the loan faster.
You can do that on a third-party platform for free. If you are currently paying a higher loan charge, you can go for a home loan balance transfer. It will help you transfer your current loan to a new lender offering a lower rate.
Doing this will help you to reduce the loan tenor and repay the loan quickly. Another benefit of a home loan balance transfer will be a high-value top-up loan. A top-up loan lets you access a considerable amount of diverse usages without restrictions. The offered rate of interest on it, along with the tenor, is also an ongoing home loan.
Pay increased EMI amount if possible
Another intelligent trick to make sure your home loan gets paid faster is to pay higher EMI if possible. But, you may think that it is possible when you go for a shorter tenor. But in that case, you have to pay increased interest costs.
But, if you pay an increased EMI amount without altering the tenor, you can save on interest. It will also help you to clear your home loan faster than the scheduled time.
Based on your borrower’s profile, you should consider one of the ways and complete your housing loan faster than before. If you don’t know which one to go for, get in touch with a finance expert to help you out.