How to reduce home loan EMI burdens
With the rising demands in property prices, buying a home in the commercial capital of India has driven a competitive edge for many real estate industries. Mumbai with a population of over 2 crores, makes a statement to deliver the best spaces because of its uncountable career opportunities along with striking infrastructural developments and world-class transport facilities, allowing immense growth for various real estate investments to take place aplenty.
Owning a beautiful house to secure a happy future has always been the topmost priority for many. What actually matters in today’s day and age is the amount being charged for the properties which in turn makes a huge difference in the demand and supply of the sales in the financial hub of the country. “The City of Dreams” with its charming amenities, captures the rising attention of property values making it difficult for buyers to independently invest in purchasing a home.
This is where home loans come into action, helping aspiring home buyers lessen the burden of spending their hard-earned income altogether. A home loan works to fund more than 80% of the cost of the property to be purchased. And thanks to the banks, who make generous contributions to lend money to the individuals for owning the home of their dreams.
Home Loans can be repaid with due interests throughout the lifetime of the borrower. It is an easy and manageable process since the stipulated amount of the loan can be paid back in the form of Equated Monthly Installments, popularly known as EMIs, within a period of 10-30 years, depending on the nature of the loan borrowed from the financial institutions.
EMIs today pose a tremendous burden on an individual’s achievements, making borrowers constantly seek methods to gain some financial relief. Thus, below mentioned are some tips on reducing the EMI burdens to successfully repay home loans that are not heavy on your pockets and don’t stretch your budgeting needs.
1. Lengthy Repayment Tenure:
One of the easiest ways to reduce the burden of repaying the loan amount is to extend the tenure of the repayment procedure. This process helps in deducting the EMI amount since the duration of the tenure and the loan repayment amount become inversely proportional to each other. It should also be noted that this method will raise the interest rates over a period of time because the payment occurs on a per annum basis.
2. Uprise Down Payments:
Making the maximum down payments during the repayment of a loan stands extremely beneficial to the borrower at all times. Since a higher amount of down payment means a lower principal rate thus, this brings a lower rate of interest on the EMI to be repaid. It is advisable to make at least 20 to 25% of a down payment if you have a strong and stable means of finance.
3. Make Full or Part Prepayments:
When given the benefit of getting a raise or getting some money handy, making the full prepayment or even paying off a small part of the loan can help in reducing the burden of EMI. Part prepayments will bring down not only the long tenure but also gradually reduce the principal amount of the loan, resulting in lower payable interest.
4. Compare and Look for New Lenders:
If you have decided on taking up a home loan and the bank you are associated with currently doesn’t provide enough offers on the best deals, then it is always a good choice to switch banks and lenders that might deliver better options on home loans. But before doing so, one must go through all the details of the money lending company and invest wisely. Compare their charges and fees with your existing bank to make sure they are credible and less expensive.
5. Opt for the Step-Down EMI Plan:
Many banks and financial institutions offer the Step-Down EMI plan as a scheme that allows paying lower EMIs at the beginning or at the end of the loan tenure. This flexible scheme works best for young earners or individuals getting closer to their retirement, helping them to pay lower interest with each monthly payment respectively.
To conclude, we really don’t need to wait for smart homes in the future. The rise of the internet of things and the invention and development of the automation industry has brought convenient living to our doorsteps for us to enjoy and live a life king-size!
The Bottom Line:
Owning a home to fulfill your dreams require you to select the best plans for home loans. Therefore, it is always important to gain the utmost information about the deals offered by lenders and companies so that you can repay the loan faster without being burdened with the EMI. Paying attention to each and every aspect of the procedure will help you to avoid a financial crisis and save your monetary needs in the long run.
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