- Date : 10/05/2022
- Read: 4 mins
Paying home loan EMI can be daunting at times. Read this article to know about easy repaying options.
Do you have a home loan but are struggling to pay off the home loan EMI? Well, it sometimes might get intimidating to pay off the considerable sum, particularly if you have some problems at a given point which might have put financial restraints on you. The house loan EMI is a fixed sum of money that one needs to pay at a stipulated time frame and avoid piling up the amount along with its huge interest rate.
Although it is challenging to reduce the home loan EMI, however, you can considerably reduce it with a few simple tricks. It is important to know the terms of the loan so that it does not become intimidating for you while repaying.
Can you reduce your home loan EMI?
Yes, the loan EMI can be reduced considerably, and over time you can take small steps, which will help you make the repayment easier over time. Some of the easiest ways include:
● Transfer your balance to a lower home loan rate
The initial step that you can take, which can aid you in reducing the debt, is by transferring your home loan to a lower interest rate. At the time of taking a home loan, the bank or NBFC has to issue you a loan for the first time, and you might be taking on the maximum amount of debt possible according to your credit profile. This means that the interest rate that the financial institution will charge will be higher.
Once you start repaying the loan, you might be eligible for a lower interest rate. Also, in the last few years, interest rates on home loans have come down, and it is possible that you are paying a higher than usual interest rate. You should contact a bank for the home loan balance transfer request and negotiate a lower interest rate. This lower interest rate can help you reduce your EMI.
● Increase the tenure temporarily.
The usual sane advice is to reduce the tenure of the loan. But if you are struggling with your EMI, it makes complete sense to temporarily increase the tenure and reduce the EMI. It is possible that you might be expecting a salary/income increase in the future, and reducing the tenure temporarily might be a good option for you. Remember to use it only if you are struggling with the EMI, and you expect an income increase in the future.
● Part Payment of loan
If you get surplus cash, for example, a bonus, policy maturity, etc., it will help if you use the surplus cash to make a pre-payment of the loan. Pre-Payment of the loan will reduce the home loan EMI, and help you to adjust to your financial situation.
● Use Money Wisely
We are sure you have heard about this point from your elders, but it is accurate and can help you in ways that you can't imagine! When you have something as grave as a home loan to pay off, the best thing that we suggest is saving and using money in a more comprehensive and scrutinized manner.
Currently, the floating rate of interest might confuse you; however, be sure of the money you spend, whatever the interest rate. Once you can figure out how to use the money and save it up, you will quickly repay the loan.
● Don't Apply for A Second Loan, Even Under Family Name
Some people apply for a second home loan even before reducing their debt. However, it is something that you should certainly never do as it will cost you dearly. Not only that, adding one more loan could be harrowing, and in case any distress occurs, you will not be able to meet the demands on time and might end up losing everything, probably more.
The Final Wrap
It's always beneficial to have a good idea of the basics, like calculating home loan EMI or levied interest rates. Before you finalize any potent option for talking up a home loan, be well-versed in the terms and conditions. Remember that each bank/lender has its procedure, and to apply for the loan and repay it on time, you have to follow the simple tricks that we just talked about. With a little bit of practical understanding of using money, you can make a big difference.