Availing a housing loan has become common these days. This is because of the rising real estate prices. However, getting a loan is simple as it has relaxed eligibility criteria, but managing its equated monthly installments could be a challenging task if it goes without planning. So, here we have come with some of the pieces of advice that will help you to efficiently manage your home loan EMIs.
Prepare an investment plan beforehand
It is always a good idea to work out on finances before applying for home loans. For this, you need to prepare a worksheet with particulars such as your monthly expenses and income. This process will help you in planning your home loan EMIs without hampering your budget and regular expenses.
Choose a home loan with affordable interest rates
It is advised to find a home loan that offers you attractive interest rates. For this, you need to explore all the options available to you before finding the right home loan. To make things easier, most of the banks and other financial institutions offer an online home loan EMI calculator that helps users to figure out the most feasible EMIs that he/she can afford.
Prepay your loan to cut down your EMI burden
Prepaying your home loan enables you to lower the interest burden. Not only this, but it will also help you to pay off your home loan at a quicker pace. Hence, it is advised to prepay whenever your finances allow. You can use the extra funds you receive after an appraisal or from your savings to prepay your home loan.
Opt for a home loan balance transfer
One can also opt for a home loan balance transfer to enjoy the benefits of low-interest rates and better flexibility. Most of the banks and other financial institutions are offering home loan balance transfer at competitive interest rates. Hence, it is advised to find the one that does that suits you the most.
Down pay more to reduce your loan burden
Most of the banks and other financial institutions offer 75% to 90% of the total cost of the property as financing depending on the borrower’s credit score and net monthly income. So, if you plan to pay more as a down payment, you do not have to borrow a huge loan amount from the financial institution which will in turn brings your EMIs down.
Select a short tenure loan
Choosing a short tenure home loan might cause you to pay higher EMIs, but this will allow you to clear off your loan faster. Also, the amount of interest that you need to pay will be lower. Further, clearing your loan in short duration will allow you to borrow more debt again if the need arises. This will help you boost your credit score.