Getting a home loan and shifting to your own place is just the beginning. Before that, you will have to think of planning how you are going to make the home loan repayment. There has to be a plan for repayment beforehand. As you can guess, your best bet is to repay the loan before those interest rates start rising. On that note, here are some of the ways to make repayment of house loans easier for you.
1. Increase your down payment
The first rule of borrowing a home loan is to decide how much loan is needed and make as much down payment as possible. As you increase the down payment, the outstanding loan amount goes down. As a result, your monthly EMI is lower, and it gets easier for you to repay the loan. Find out how you can lower your EMIs by making a higher down payment. Maybe you can consider liquidating a few investments or leverage some of your savings for the down payment.
2. Additional charges on the loan
A lower interest rate might have lured you to the lender, but there can be more to the story. Consider the additional charges, such as late payment penalty, processing fee, etc. All these factors can increase your home loan interest rate and monthly EMIs. So, before you even take the loan, consider all these additional charges. Will you be able to repay the loan properly even with these charges?
3. Research to get the lowest interest rate
Do not make the mistake of taking the first loan offer that you come across. At the same time, you will have to look beyond the interest rate and read the fine print to note any hidden charges. Keep in mind all the factors and get a comparatively lower interest rate.
4. Consider making part-payments on loans
In this arrangement, you pay the entire loan amount as partial payments to significantly reduce the outstanding loan amount. Use all your sudden income, profits, gifts, bonus funds, matured loan amounts, and the likes to make these part payments. Repaying your loan will be easier if you can increase the part payments you make on the floating loan.
5. Get an extended tenure on that loan
Many people make the mistake of getting a shorter tenure to repay the loan quickly. However, a shorter tenure means a higher interest rate and EMI. It might get difficult for you to pay up the monthly EMIs as a result. After all, you might encounter a financial emergency that impedes your repayment ability. Thus, it is always better to get an extended loan tenure. Also, it will positively impact your eligibility for a loan.
And that’s all! Keep these 5 points in mind when you want to easily pay the loan amount. Make sure to talk to your lender to discuss these ways in detail.