Five ways to pay your home loan faster
You want to make a significant investment but don’t have the funds yet. You take a loan. Banks provide different kinds of loans like Home loans, car loans, student loans, etc. However, the struggle starts when the time comes to pay it off. You shift your expenses and adjust your lifestyle accordingly to pay off the loan. Nobody likes to live in debt, so you make all kinds of adjustments. Having a roof over your head is such a content feeling. However, having a loan is not.
Choose your loan wisely
When choosing your loan, try and look into all its aspects. You need to select a loan that will meet all your criteria and, at the same time, be beneficial for you in the long term. So, do your research, look at all the lenders, and choose the one with the lowest interest rates. Then, look into different apps which will compare your loans for you.
The more time you take to pay off your loan, the more you will be paying interest for that. So instead, try to pick a loan that will take less time for you to repay. This will ensure that you don’t spend more money on paying interest for the loan. You can use a home loan repayment calculator to help you understand the amount you need to bear against the money you have borrowed.
If you have the funds right now with which you can pay off some amount, we recommend that you do that. For example, you can make part prepayments so that you do not need to worry about a substantial principal amount and then pay off your EMI on a lower principal amount. This will help you a lot in the long run since you will be paying interest on a much lower amount, ultimately saving you money. Also, try to make a significant amount of down payment if possible. For example, if you have a down payment that exceeds 20%, it will reduce the principal amount, which will reduce your interest rates. So, in the end, you pay less interest.
Pay timely higher EMI
When you pay lower rates of EMI, it becomes easier for you to pay that amount regularly, but in the long run, you end up paying more interest over time since your loan repayment time increases. However, when you pay higher EMI, you pay off the amount in less time, saving your money in the long run. As a result, you pay less interest, saving up there.
Also, Check – 6 Tips to Make Ends Meet When Money is Tight
Higher Down Payment
It will be better to have a higher down payment depending on your funds. Try making a higher down payment. This will ensure that your principal loan amount is reduced. This will also result in a reduction in the interest rate and the money you will be paying. When repaying your home loan in the future, you will be thanking yourself. You will not only be able to pay your loan easily but also faster.
Look into the laws of your country and check out if you have any exemptions in case of tax. Try and take the maximum advantage you might get while paying back your loans. Your tax refunds can vary if you’re a single or joint owner, but try to get all the benefits you can get. This will help you save some money, and you can use that to repay your loan faster. Having a loan means you’re already in the crunch. Tax benefits can help you in such situations. They can help you stay afloat in the market and give you some traction at the moment.
Having a place that you can call your own is something we cannot express in words. The security of having a roof over your head is enough to leap into taking a loan. However, trying to repay the loan can be pretty tricky. So, take all the steps to repay your loan faster and let that tension go. Home loans are long-term commitments. So, it is essential to treat it in that way.
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