Are you looking forward to moving to your new home? Did you take a home loan for fulling your dreams? That is great. You need to manage it well, and that is only possible if you find accurate results of the equated monthly instalments (EMIs). Only then can you enjoy your new home without any financial burden.
While you prepare for the housewarming function and make a list of the people you want to invite for the event, make sure to know how to manage your house loan. These following methods should help you handle your loans efficiently –
- Money management: Considering you have a housing loan to pay off, it becomes essential to handle your finances well. The best possible way to do is to master money management skills. You cannot mess up with your finances and later blame other situations and people for the same. First, make a list of the places where you have invested your money in. These could include PPFs, EPF, postal deposits, and ULIPs. You should be aware of where your hard-earned cash is stored and where it goes out. If you feel your funds are heading in an investment that is not worthy, shut them. This way, you can focus on prepaying the loan.
- High EMIs: The other way to manage your home loan EMI is by opting for high EMIs. Now you might be wondering how does high EMI help. High EMIs reduce your tenure and the total interest amount also lowers. So, by opting to pay more every month, you are reducing your financial stress. Moreover, as tenure decreases, you get more time to focus on other aspects of your life, such as retirement planning.
- Partial prepayment: Rather than following the standard EMI payment system, you could consider advance payments. You can use your one-time incomes to prepay housing loans. If you receive a promotion or your fixed deposit gets matured, use the funds to prepay the loan. It not only reduces the loan obligation but also the tenure. The best part is that not all lenders levy substantial charges for loan prepayment.
- Low-interest rates: Always closely monitor the interest rates. As soon as you notice a dip, switch to lower interest rates. This is called balance transfer. It all lies on how closely you monitor the market. Switching to a lower rate than the existing one will cut off a few years of your loan. You need to, however, make sure that you do not jump too many times owing to lower interest rates. Do not switch if the difference is not much.
- EMI calculators: Do you know every lender has a home loan EMI calculator at your perusal? It may seem complex to deal with numbers and calculations. The calculator helps you understand what loan amount you sustain. The best part they are simple, convenient, and easy to operate. You can also determine which loan deal is ideal for you as the calculator allows you to provide inputs as many times as possible. It is better than getting calculations done manually as you could end up making errors.
If you keep all these points in mind, managing housing loans will be a walk in the park.