Easy Ways To Know How To Pay Home Loan Faster
Every homeowner wants to pay off their home loan as soon as possible, as a lot depends on it. The home is a security for their family, and one cannot be slack about it. The sooner the loan is paid, the more secure the owner and his family will feel. Using the right strategies, home loans for flats in Kochi can be paid faster, potentially saving thousands of rupees and reducing the financial stress.
Let us consult our home loan guide to discuss these strategies so borrowers can pay their home loan faster.
1. Increasing the EMI Payments
One of the smart ways to reduce the loan is to pay more EMI annually. This is an option offered by many lenders these days to borrowers who can afford it. Even a small increase in the EMI payments can reduce the payments significantly. Another option is to make extra payments or switch to bi-weekly payments. This too can reduce the EMI in the long run.
2. Short Loan Tenure
The loan tenure and EMI payments are inversely proportional. If the loan tenure is long, then the EMI payments will be reduced but the interest component will be higher. On the other hand, by opting for a shorter tenure, borrowers may have to pay slightly more EMI, but the interest payment will be lower, and the loan will get paid sooner.
3. Pre-Payments
The RBI has removed prepayment penalties on floating-rate home loans, making prepayments easier. Making lump sum payments can result in significant savings. Use salary hikes, bonus payments and incentives to make prepayments to help you pay the home loans sooner.
4. Home Loan Balance Transfer
If you find a lender offering a lower rate of interest, then you can transfer the balance of your home loans to reduce the overall interest. Make sure that the processing fees and hidden costs are factored in the overall cost of transfer. You can make the transfer only if you qualify for the home loan with the new lender.
5. Lumpsum Payments
If you receive large windfall gains, use it to pay towards the home loan. An inheritance, gift deed, large bonus or an unexpected financial gain can be used to reduce the EMI burden. A large payment can reduce the overall loan amount, reducing the EMI.
Paying home loan faster requires strategy and planning. Sticking to the plan and making payments on time will help you save lakhs. Some builders in Kochi work with their homebuyers, helping them to repay their loans faster.