Home Loan, Saving Tips

5 Smart Ways to Pre-Pay Your Home Loan

13 December, 2020

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5 Smart Ways to Pre-Pay Your Home Loan

Buying a house gives us a sense of satisfaction and contentment but, it may happen that we may not have the monetary power to support us to buy a property for which, home loans come in handy. Buying your own house is always the best option but you have to keep in the mind the various risks and determine a specific path and plan accordingly, for which you have to choose the right type of home loan, which is extremely important. Always remember to pay your EMIs on time but, also try to decrease your financial burden by pre-paying your loan in partial or full as it always helps you to save more money. Here are 5 way to pre-pay your home loan and enjoy the comfort of your very own house.

  • Always try not to get the pre- EMI plans which are mainly offered by property developers for specific projects, when you are buying a house. You will only end up paying more amount of interest once you move in as principal repayment. The only time you should get this plan is when you are having issues with your cash flow.
  • It is always advisable to increase the amount of your EMIs when you have an increase in income because; the sooner you pay off your debts, the better. So, when you see that the interest rates are decreasing or falling, opt for a shorter tenure instead of reducing the amount of the EMIs.
  • Always direct your yearly bonuses or excess profits towards paying off your debt as it always helps you by reducing your financial burden. Extra cash is always welcome (in the legal way, of course!) through lottery winnings or by selling off your old vehicle or goods which you do not require any longer.
  • Be smart by regularly saving your income on a monthly basis in small proportions; say 5000-6000 rupees a month, which will only enable you to pay off your debts much faster and conveniently in the coming year(s). Go for the recurring deposit option in the banks. Use this monthly savings towards annual pre-payments of your loan which will reduce the EMIs and also the tenure of the loan.
  • Banks provide us with numerous plans when it comes to loans or home loans, in specific. Be smart enough to choose the right plan which will benefit you all the way. One such plan is the Loan Overdraft Facility which enables you to keep surplus amount in the loan account, after you have paid your EMIs but, lets you to withdraw your cash whenever you wish to.

Home loans are a big commitment and can be a headache at times if not paid accordingly. Always try to pay the debt of your home loans as soon as you can. For more details, visit https://chqbook.com

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