Smart Way to Manage your Home Loan EMI in India
Home loans are a nifty way to get you landed in your dream home without an excessively large cut in your savings or inheritance. But when it comes to repaying the EMIs, only a few of us are lucky enough to be able to deal with the sudden overheads after moving into the cozy rooms. Home Loan EMI Calculator and a set of carefully planned moves can go a long way in ensuring that financial headaches stay far away.
Most of the means for managing and repaying the home loan in better ways are within your reach. But just like the air we breathe, these means remain imperceptible. Take for example, investments. Almost everyone understands that investments are required to reap benefits of a higher return after a period and some also help in tax saving. What we overlook in the process is that some of the investments might be paying out lower interest than what the loan demands of us.
A simple look at a Home Loan EMI Calculator will present you with the following fields
- Loan Amount
- Tenure/Period in which the loan is to be repaid
- Interest rate
- Processing fee (might be waived due to promotional schemes)
- Prepayment options
- Prepayment amount
- Prepayment frequency
- Prepayment fees (if applicable)
From the information above, the key factors that contribute to a healthier repayment scheme can be mentioned as below –
Higher frequency and amount of prepayment
If you have recently bought a home encouraged by a salary hike, a hefty bonus, a promotion or even a sudden rise in the stock values of your investments, it is a really nice idea to use the even the smallest windfall towards settling the loan early by adding a prepayment amount every now and then. The higher the frequency of the prepayment, the lesser the number of years for which you have to bear the loan. The same can be said about increasing the amount of the repayment. It effectively cuts down on the principal amount, you end up paying lesser interest and the EMIs help clear off the balance in lesser time.
Lower interest rate
An option to switch banks might be a wise decision if lower interest rates can be availed, but take care not to jump too often for smaller changes in rates. Keeping an eye out for the different rates of interest for different banks definitely helps. Even if you keep your EMI amounts the same, the burden of interest gets lowered.
It’s always a good thing to analyse your monthly spending again, especially when you have to repay a home loan. If you can afford to cut down on some expenses and increase the EMI amount by even a small amount, bit by bit, that amount adds to a sooner repayment of the loan and lesser interest being paid.
Home loan EMI calculators are an easy way to plan how much you should be saving, investing and spending in order to get the most out of your new home and your total income. Owning a home is a definite joy, that can be experienced in full only after you repay the loan taken.