Introduction
Applying for home loans is the most practical way to receive
the necessary funds to purchase a property or your dream home.
Housing finance can simplify the task of funding the home of
your dreams. With attractive interest rates and flexible tenors, one can incur
popular credit solutions for all the big-budget real estate purchases.
Thus, when it comes to repayment of home loans, you need to
be smart. Otherwise, the EMIs might put pressure on the finances. If you have
financial means, consider reimbursement as soon as possible, which will help
you be debt-free.
7 Ways To Pay Off Your Home Loan Faster
There are a few ways to reduce the burden of home loan EMI
repayments. Here are seven different ways you can pay off your home loan
faster.
1. Make Maximum Down Payment
Instead of taking the maximum loan amount, you should opt for leading down payments as much as possible, which can be determined using a debt consolidation loan calculator. You can also significantly reduce the principal loan amount and lower the EMI and interest burden.
For an effective home loan repayment system, clear the down
payment within a range of 25% or more.
If you have some sort of investment that is not incurring
the expected returns, you can avoid liquidating them and reduce the amount of
debt in the future.
2. Pay Higher EMI
If your income has increased or you received a good
increment after availing of a home loan, you can discuss it with your lender
and select to pay more EMI, which would eventually decrease the home loan
tenure.
This is a common way of repaying home loans faster,
specifically when you are a salaried individual.
Even with a small increase in EMI, you can eventually reduce
the loan tenure.
3. Take Advantage Of Emi Waiver Option
Sometimes, the lender announces lucrative loan offerings for
borrowers who have consistently repaid the amount.
On the other hand, there are times when the lender rewards
them by waiving off a certain number of EMI during the fag end of the loan
tenure.
Therefore, if you are sure that you are careful about
availing these claims, you can ask the lender how they will offset the
discounts. Hence, these loans can have higher interest than the regular
schemes.
4. Negotiate The Loan Terms With The Lender
This is another way you can reduce the home loan repayment faster. At times, the lender might not lower the
loan's interest rate in line with significant changes in government policies.
Remember to be aware of the changing policies and
regulations with lenders to revise the loan interest rate per the RBI
regulation.
Thus, if you have a seamless loan repayment process, you can
reduce the EMI burden and look for options.
5. Make Part Repayments
Well, the lender does not charge for a certain amount of
part-payment, specifically on home loans with floating interest rates.
Even with part payments, one can drastically reduce the home
loan amount. Thus, despite waiting, it is recommended to make home loan
payments whenever you have a surplus fund, such as a gift, bonus, or another
unexpected source of income.
Therefore, make sure that you check the pre-payment fee with
your lender, as some of them charge and some of them do not.
6. Look For Tax Benefits
Generally, a home loan is very expensive when it comes with
multiple tax advantages that assist you in saving a considerable amount of your
money every year.
By availing the best dedication, one can save a lot of
taxes. It has been over the years that these savings can add up and assist you
in repaying the loan in small partial amounts.
This would reduce the remaining repayment time period.
7. Consider Other Charges And Fees
Remember to select a lender that offers a lower interest
rate and charges lower fees.
When you select the lender, analyze the processing of
different hidden and late payment charges, as they emphasize making a
considerable difference in the amount.
While, late payment can also be a type of loan that might be
a burden later, so try to make repayments on time. Similarly, delays can also
create a negative impact on your credit scores, which can lead to rejection of
your loan application in the future.
Select Your Loan Tenure Wisely
When you select a shorter repayment duration, you eventually
pay off the debt sooner. Similarly, if you choose a faster loan repayment
period, you also pay a lower interest rate.
Along with the techniques mentioned above, you should also
select the loan tenure wisely. Repaying the home loan faster provides your
surplus in the hands. It can be used to obtain goals, for instance, family
vacations, retirement corpus building, weddings, or children's education.
When you avail of a home loan, it might be easy, but
planning the repayment can be challenging. Thus, paying off debts early can
feel rewarding and reduce financial stress.
