Smart ways to manage home loan EMI’s

The home loans need to be managed smartly to be tension-free while repaying the loans and avoid getting overburdened while availing & repaying loans. The borrower thus needs to do proper financial planning for the repayment of loans. Systematic financial planning can help complete the repayment process smoothly by the borrower. The home loans can be availed at minimum interest rates of 6.50% per annum. The borrower should check on the internet the prevailing rates of the home loans to avail the loans at the lowest possible interest rates. The lower the interest rates lower is the repayment value for the borrower. To avail of the loans at lower interest rates or to better negotiate the interest rates, it is necessary that the borrower maintain a good CIBIL score. Bank expects a minimum CIBIL score of 700 points to avail of loans or more. The CIBIL score of 400-700 is considered as average and less than 400 as poor. In such cases, the bank does not approve the loans. To improve the credit score, it is necessary to repay the credits on time before the due date and not default on any of the credits.

Proper financial planning is necessary for the timely repayment of the loans. The borrower should maintain a sufficient bank balance in the bank account to avoid any problems is occurring during the repayment of loans. Also, it is better to invest in financial instruments like mutual funds or else stocks to get higher returns on the savings rather than fixed deposits. Only the borrower should be careful while investing in the stocks or the mutual funds, as sometimes the investor may face loss in the investments if the market crashes. But if the investor gains handsome returns on investments, then the returns gained can be utilized to repay the existing loans. The borrower can also take a joint loan to reduce the burden on the single person if more than one person in a family is earning. Most commonly, availing of loans with the spouse is a better idea as it can help share the burden on the borrower. Also, if the loans are availed by two persons together, the loan eligibility increases for the loans. Higher amount of loans the borrower can become eligible for in case of joint loans being taken.

Following are the ways to smartly manage the home loans EMI:

  • Money management:

The money should be managed smartly by investing in financial instruments and avail higher returns on investment. The returns gained out of the investment can be utilized for the faster repayment of loans. Also, the borrower should maintain a sufficient bank balance so that if there is any delay in the salaries, the loans installment payment should not get affected.

  • Choose the tenure wisely:

The tenure in case of good salary should be lower as in case of the loans being taken with the same interest rates can be charged with higher repayment value in case of higher tenure while as the loans if taken for a shorter span can be charged with lower repayment value. If the salary is low only in that case, the higher tenure should be chosen.

  • Do partial pre-payment of loans:

The borrower gets a bonus or incentive from the employer; then, in that case, the borrower should pre-pay the loans to become early debt-free.

  • Switch to lower interest rates:

The borrower can either choose the lender who charges the lowest interest rates by researching on the internet or even change the lender in case of running loans. So thus, the loans by transfer to another lender can help the lender save on interest repayment as the credit transfer can help save money for the borrower.

Thus smarter ways of repaying loans should be applicable for the repayment of loans. The borrower should avail of loans at the lowest possible rates from the bank and maintain a high CIBIL score so that banks can provide loans at competitive rates. Also, the repayment should be made faster if the loans are taken to reduce the tenure of loans and become early debt-free.