Practical Steps to Manage your Home loan EMI
Here are some tips for pulling you out from your EMI woes if you plan to take a house loan.
Indian markets are booming with prospective home buyers, thanks to a better per capita income of middle-class households. Various big and small companies have sprung up like mushrooms in the vicinity of every tier one, two and tier three cities, which are building townships with flats, villas and penthouses to attract the prospective buyer towards investing in homes. The buyers are promised easy loans by various financial institutions and banks on a specific interest rate, requiring a particular estimated monthly instalment (EMI) to be paid over a particular period.
If you are one of those homebuyers who have been vetted and qualified for loan eligibility and are ready with the amount for an initial down payment, here are some points that you should keep in mind before taking a plunge in this huge financial decision.
- Look out for the cheaper interest rates: You need to do extensive research about the various banks and their loan policies by comparing the interest rates. Opt for the one that provides the lowest rate of interest so that you get to pay the cheapest EMI on your loan
- Save and Repay: Since buying a house is one of the significant decisions of your life, you need to prioritize your financial savings and loan repayment as and when you have money. This shall not only ease your budget and reduce your monthly instalment but also add to your credibility as a customer. Else you must ensure that your EMI is always on time to increase your credit score. A long-term default could attach your property with the bank causing you a lot of legal trouble.
- Keep a high amount as EMI: It might seem like an absurd idea to many lenders, but this shall help you in the long run. After all, you would be able to clear your dues before time. Therefore it shall help evaluate your existing and future funds for a better idea about loan repayment.
- Switch banks if the need be: There comes a time when you find that the expense for the existing home loan is too high, and there are cheaper options available from a different lender. It is highly recommended that you switch your loan from one lender to another, which is hassle-free save for some paperwork.
EMI means that you will have a dedicated expenditure on your monthly salary for the next 10-15 or 20 years. And boy! That is some challenging commitment but wisely managing it is not that tough.