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Home Loan

Smart ways to manage your home loan

Mar 08, 2017

If you are searching for home loans this means sometime in the near future you are planning to move into a new flat and start your life afresh. Home loans are a great way of financing your new house but to manage it efficiently is not that easy as you might think.

Problems in the long run

When you start calculating how much you need in terms of loan in order to finance your new flat and how much you will need to pay in form of EMIs, you forget to calculate the other expenses that can make your EMI repayment a mammoth task.

Paying EMI is something you can calculate and device a future plan for, but you cannot plan for unexpected expenses such as tuition fee of your children and other household expenses. These may look petty expenses now but when the money shortage starts feeling these expenses can come back to bite you.

Managing your home loan smartly takes planning and creativity. You need to know where you stand and how much you can chew and hence you should bite accordingly. Here are some smart ways to help you manage your home loans better.

Manage your home loan using these smart hacks:

  1. Pay a larger EMI: If you are currently having no monetary issues and your life is moving forward smoothly, you should aim to lower down your debts as quickly as possible. If your money stream is flowing freely then rather than spending the extra money on treats you should strive to make your loan tenure smaller.
  2. Pay a bigger down payment: If you have stashed savings in an account this is the time to use them. You get loans based on your income not your savings, hence you can take a smaller quantum of loan and pay bigger down payment using your savings. This will help you to repay your loan faster without paying too much in form of interest.
  3. Pay more when possible: If you get a salary hike in the future, rather than increasing your expenses it would be better if you divert that extra money into repaying your home loan.
  4. Wrap up other loans: If you are paying your home loan at 10% interest rate and paying your credit card debt at 40% interest rate, the ideal thing for you is to wrap up your credit card dues as quickly as possible.
  5. Change the lender: You can approach your lender to provide better loan terms than they already are and if he refuses you have the option to change your lender. When you approach a different lender he will in all probabilities give you loan terms that suit you the best.

Home loans can be a hassle to manage if you have not thought through the entire process before making a final decision. All is not lost though, as these smart hacks can help you repay your home loan with ease.