Struggling to pay a home loan EMI? With rising property prices and interest rates, more people are feeling the pinch of a heavy home loan burden. Thankfully, some tips can be used to lighten the load in 2023. Listed below are 10 top home loan tips that can help lower the home loan EMIs this year.
From learning about a loan against property EMI calculator to exploring new home loan EMI options, these tips will help make smarter decisions when it comes to managing home loan debt.
Credit Score & Home Loan Eligibility Calculator
One of the first things one must do before finding out their home loan eligibility is to check their credit score. This tells lenders how reliable they are when it comes to repayment. The higher the credit score, the lower the interest rate will be and hence, a more manageable EMI burden.
After this, it is important to understand home loan eligibility and a homeowner's financial situation and determine how much one can afford to pay each month as an EMI.
One can avail of various free online calculators like the home loan EMI calculator or the home loan eligibility calculator or the loan against property EMI calculator to determine one's EMIs for different loan amounts, tenures and home loan interest rates.
A home loan eligibility calculator will help decide on a comfortable repayment period and also help plan the budget better.
Refinance Existing Home Loan
Consider refinancing or transferring the outstanding balance to another lender at a lower rate of interest. This will save considerable money over the loan tenure. Alternatively, when looking to take out a new home loan, compare the different lenders and their offerings before making a decision.
Don’t forget that not all banks and financial institutions offer the same terms for home loans. This means it’s important to check the rate using the home loan EMI calculator at various banks and compare different lenders to find the one that offers the best terms.
Customers should also consider factors such as processing fees, pre-payment penalties, pre-payment charges, etc. while selecting the right bank or financial institution for the home loan.
Explore New Home Loan Options
With technological advancements, there are now several new home loan options offered by banks and non-banking financial companies (NBFC) that offer more attractive interest rates than other traditional means. These include fixed-rate loans, variable-rate loans, flexi loans, etc. There are also co-borrowing options that allow two people to take out a joint loan together, allowing both of them to benefit from each other's income streams.
Make sure to understand the features offered by each and check the rate in the home loan EMI calculator before making a decision. Additionally, there are also special offers available from time to time that could make the deal even more attractive.
Always remember to negotiate with lenders for the best possible interest rate offered by them and lock it in place as soon as possible. This way one can enjoy a reduced EMI burden throughout 2023 without any surprises
Increase The Loan Period
Increasing a loan tenure is one way of reducing monthly instalments while still maintaining an acceptable amount of principal repayment every month. The longer repayment period reduces both the principal amount due at any given time, as well as the overall interest paid. Thus, extending the loan period helps lighten the load on monthly payments.
Consider Variable Rates For A Long-Term Loan
Planning for a home loan? Consider choosing between a variable rate or a fixed rate. Fixed rates are usually higher than variable rates, but they stay the same even when the interest rates go up. Variable rates can give borrowers some breathing room depending on the state of the economy.
However, variable rates may rise later if inflation increases. So always look at all long-term scenarios before making any decision. Make sure to check the rate in the home loan EMI calculator before selecting this option.
No Unnecessary Loans With A Home Loan
Taking multiple loans at once can add to the overall repayment burden so make sure that any additional loan is necessary before doing so.
Also, consider any potential risks associated with taking multiple loans simultaneously such as an increase in interest rates due to being classified as ‘highly leveraged’ by lenders.
Prepay The Loan
Prepayments can help reduce the overall amount of interest that will be paid on any outstanding debt. It's important to consult with the lender before proceeding with a pre-payment plan, as there may be fees associated with doing so. By prepping for payments in this way, one can save money in the long run and make additional investments elsewhere.
Another option is to make extra payments whenever possible. It can also help reduce some of the interest that is charged on long-term loans which can significantly lower the repayments in 2023.
Consider Tax Savings Offered by Home Loans
Many banks offer tax exemptions on certain types of home loans depending upon their tenure and type. Most lenders offer tax exemptions under Section 24 and Section 80C, which allow up to Rs. 1 lakh deduction per financial year when taken jointly with other savings like PPF and insurance premiums.
Moreover, some lenders also offer tax benefits under Section 80EEA, which allows an additional deduction of up to Rs. 1.5 lakh per financial year when certain criteria are met.
Keep in mind to look into these options when taking out a new loan. They could help save money for other important expenses throughout 2023. Do check with lenders on their eligible products & benefits before taking a decision!
Make Use Of Balance Transfer Offers
Balance transfer offers are a great way to manage monthly payments, especially if they come with no processing fees or other hidden charges. These offers often come with special introductory rates too which could provide some relief during hard times. Just make sure, however, that balance transfers are made only when it makes sense to do so!
Conclusion
There is no denying that taking a home loan can be a huge financial burden. With the ever-increasing interest rates and rising prices of real estate, the EMI burden can become too much to bear if not calculated and managed correctly.
But TATA Capital’s Home Loan, which is essentially a one-stop shop for all financial monitoring needs, makes it easier to repay a home loan EMI easily. This allows borrowers to track their progress towards achieving financial freedom with real-time updates on repayments made against their total liability, smooth integration into core banking systems for easy access and also receive personalized alerts whenever there’s an opportunity for savings or rewards. All this makes managing finances easier than ever before. For more information on TATA Capital’s Home Loan click here.
Adopting these top 10 tips can help lighten the load on home loan EMI, manage finances better, build equity faster, save taxes and get closer to financial freedom. Make sure to do thorough research and consult experts for maximum benefits.
Hopefully, these tips will help reduce the EMI burden considerably in 2023! Feel free to reach out for more information on how to manage one's finances after taking out a home loan.
21 February 2023
7 mins read
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