Tips To Repay Your Home Loan Faster
Now that you have taken a home loan, chances are that you could be worried about the home loan EMI. After all, taking a home loan plan is not enough. Besides having the financial commitment to make regular EMI payments, you must also have a suitable financial plan to repay your home loan as soon as possible. To help you decide on a fast home loan repayment, here are the best home loan tips:
1. Increase your down payment:
The first of the home loan tips is to make a higher down payment. This will lessen the total dues or the overall loan amount. A reduced home loan EMI payment can mean faster repayments. Experts often suggest making a downpayment between 20% and 30% of the total loan amount.
2. Select a home loan plan with lower interest rates:
Before you select the best home loan plan, always try to find a lender with a low interest rate. This will ensure that the financial burden of your home loan EMI is considerably reduced. If you have already taken a home loan plan with a higher interest rate, consider changing it or refinancing it through the balance transfer option with a low-interest home loan provider.
3. Opt to pay higher EMIs:
Want to repay a home loan quickly? Select to pay higher EMIs. However, paying a higher loan EMI might not sound like the best idea in the short term. Market experts often suggest this as among the best home loan tips to reduce your debt burden swiftly. Of course, you are paying more now, but doesn’t this mean your debt burden is getting reduced faster?
4. Select to pay shorter loan tenures:
This is also among the basic home loan tips to ensure you pay the EMI immediately. By selecting a shorter tenure, you can quickly reduce your debt burden. Remember, a shorter tenure reduces your financial obligation by reducing the overall interest rate. Once you finish your home loan EMI payments speedily, you can also take a fresh loan for any other requirement. Repaying your home loan faster will also enhance your credit score.
5. Think seriously about making part prepayment of your home loan:
A home loan plan always allows you to make a part prepayment. If you have not given much thought to this aspect of a home loan, you should do it immediately. Suppose you have taken a home loan plan and choose to make a part prepayment; it will mean that your overall outstanding home loan amount will decrease. This, in turn, means reduced home loan EMIs. Now that your home loan EMI has decreased, won’t you be able to pay them faster? No wonder that market experts say that making part prepayments is among the best home loan tips.
6. Never miss your home loan EMI payments:
Once you get a home loan plan, you should never default on your EMI payments. This will adversely affect your credit score and result in the imposition of penalties and fines. Sticking to the regular payment schedule is among the best home loan tips for becoming debt-free quickly.
7. Use your right to get tax exemptions promptly:
Did you know that a home loan plan also allows you to receive tax exemptions? Yes, you heard that right. Depending upon your eligibility, you can get exemptions under Sections 80C, 24(b) and 80EE of the Income Tax Act. Consult a tax advisor or carefully review the exemptions and refunds sections in the Income Tax Act. And once you get a refund, use the amount wisely. This will ensure that you can repay home loans quickly and hassle-free.
8. Rent your house:
The last among the home loan tips is to rent out a part of your purchased or built house/flat. This would mean a steady and regular income to meet your home loan EMI obligations.
The Bottom Line
Keeping informed about tips to repay the home loan faster can make the crucial difference between financial well-being and a financial crisis. If you have taken a home loan plan, pay attention to each and every aspect of your home loan, including your home loan EMIs. If you need further information about the important aspects of home loans, visit the Piramal Capital & Housing Finance (PCHF) website.