5 Tips to Repay Your Home Loan Without Compromising on Your Lifestyle
Here are five great tips to help you repay your home loan in a way that you don’t need to alter your lifestyle, even to make a part payment.
Choose a Shorter Tenure
Home loans come with flexible tenure of up to 30 years. While choosing the most extended possible assignment can help you pay lower EMIs, it also stretches the repayment period for most of your working life. Plus, the interest adds to the total amount you will pay with a longer tenure. So, choose an assignment where the EMI might be a little higher, but it helps you pay back the amount as quickly as possible. You could also consider part payment if you come into some money or receive a salary hike or bonus. However, make sure to check the terms and conditions regarding pre-payment before you do so. Some banks might put a penalty on early payments.
Transfer Your Balance to a Bank with Lower Interest Rates
Not all banks charge the same interest rate. If you’ve taken a loan with a bank that charges a higher rate, consider transferring the loan to another bank with lower interest rates. Many Indian banks offer balance transfer facilities these days. This is a great way to reduce your repayment burden and achieve financial freedom.
Adding a Co-Applicant
Adding a co-applicant is a good way of keeping your stress levels low during the home loan process. A spouse or any other family member can become a co-applicant on your housing loan. Banks feel more comfortable too and judge co-applicants as lower-risk borrowers since if one defaults, the other can help with the repayment.
Home Loan for Women
If you are a woman and planning to buy a house, you’ll get some fantastic benefits on loans. Women’s home loans are much more rewarding, from better interest rates, lower stamp duty, and higher tax benefits. It’s also another reason why having a female co-applicant can help you gain more benefits.
Save and Pay a Higher Down Payment
Paying a more significant amount as a down payment means you need to borrow a smaller amount. For obvious reasons, a smaller loan is much easier to pay off. So, start saving through fixed deposits and other investment vehicles a few years before buying a home. This will give you time to accumulate a corpus that can go into making the down payment as high as possible. The earlier you begin saving, the larger the canon you will garner.
Buying a house is an important financial decision. It provides you with the much-needed security in life. However, it’s a myth that it will come at the cost of your lifestyle. A little bit of research on managing repayments can be beneficial. It can help you strike a good balance and maintain your standard of living.