In today’s time, buying your house has become one of the most expensive deals and has to spend a huge amount for it. At the same time, most people resort to Home Loan from the bank to buy a house. But, no matter what kind of debt is, it is better to get rid of it soon.
Especially for middle class, this EMI burden is a big confusion. If you too have bought a house with a home loan and are worried about EMI day and night, then this news is for you. Actually, by adopting some tips, you can get rid of it ahead of time. Let’s know in detail …
Get rid of long home loan soon
People are also under stress especially about home loan, because a long time passes to repay it and the interest amount becomes more than the loan amount. In such a situation, they often think about repaying the loan soon or reducing the burden of EMI. Then in many ways, from which you can breathe a sigh of relief by reducing this burden and you can get rid of home loans soon. For this, many options including pre-payment or loan refinance can prove beneficial.
First option- Loan Pre-Payment
The best way to get rid of home loans soon is a pre-payment. If you do not want to fill the EMI of home loan for 20 to 25 years, then you can choose this option. Its fund is that you should deposit some money in the home loan account in between. However, it depends directly on your income how much amount you can deposit apart from EMI. This will slowly reduce your loan amount and you will get rid of it before time.
Understand as an example, then suppose you have taken a homelone of 50 lakh rupees for 25 years and its interest rate is 8.5 percent. Then your installment of every month will be Rs 40,261. Now if two years have passed since you pay this loan EMI, then you have to pay 276 EMIs in 23 years. On the other hand, if you have a provision of 10 lakh rupees and you use it to pre-pay it, then your EMI will remain only 162 instead of 276. That is, the tenure will be reduced and interest will also have to be paid. You can decide the pre-payment amount according to your own. Explain that you can reduce not only the loan period, but also EMI through Pre Payment.
Second option- more EMI payment
This option can prove to be very effective especially for employed people. Actually, people take home loans, so as they increase their salary, they can accumulate some part of their growth with Home Loan EMI, that is, they can increase it. If you deposit a installment of loan EMI every year, then it reduces the tanor of the loan and you have to pay less interest. In this way you can finish the loan 2-5 years ago.
Third option- Loan Re-Finance
The next option is the home loan refinance, the big advantage is that you can pay a new loan at a low interest rate, you can repay the existing home loan. Actually, if the Home Loan Interest Rate has come down in the market, then you can reduce the EMI going every month by refining your existing home loan at a low interest rate. At a low interest rate, you will be able to save a lot of interest of interest by reducing the loan tanure. Apart from this, you can switch to floating interest rate from fixed interest rate with refinancing.
Fourth option- Loan Transfer
If you have taken a home loan from the bank, if its interest rate is higher than other banks, ie other banks are offering low interest rates. So you can transfer your loan to a low interest bank while assessing savings. This can reduce the burden of your EMI. However, it is necessary to assess savings in this process, because the loan charges extra charge on transfer. Keep this in mind here, so you can transfer home loan only twice.
Fifth option- EMI reduced investment
An option can prove to be better for you in reducing the burden of home loan, which will also prove to be a wealth creator for you. Actually, if your monthly EMI is high, then by reducing it, you can SIP in the remaining money in mutual funds and you can get up to 12-15% returns on an average. In such a situation, when your loan is over, till then a thick amount can also be gathered through this investment.
If you understand this only on the basis of the example mentioned above, then you take a home loan of 50 lakhs for 25 years at an interest rate of 8.5%, then its EMI is Rs 40261. Now after filling two years, if you cut EMI by Rs 8,261, then it will be Rs 30,000, you keep filling it and invest in a monthly SIP of Rs 8,261. In such a situation, during the remaining 23 years of tanure, you will deposit Rs 1,10,31,844 through this investment, in which Rs 87,51,808 will be returned. Even after filling a heavy loan, you will be able to stay fit financially.
—- End —-