Repaying low interest home loans? Here are some quick tips to make things a bit easier

by Finway FSC Empowering People Financially

Everyone has a lot of dreams when he is five years old or so such as becoming a superman or batman. But as one grows up, the dreams and aspiration change or we can say, become more practical and realistic. Though dreams vary from person to person, there is one dream that remains constant in everyone’s life—a home of one’s own. Home is where one can turn up to when tired, where he can start his family, and where one can enjoy the bliss of old age after retirement. But, it is a huge task for almost everyone to own his dream house. With thin salary packages and big expenses, it appears almost an impossible job to make one’s dream of owning a house come true.

Low interest home loans offered by government or private banks and the non-banking financial companies come to the rescue of the financially weak people. Besides providing one with some personal comfort zone, purchasing a home is probably the biggest financial investment that someone can make in his lifetime. And, this is the reason why one should really be extra cautious while opting for low interest home loans or repaying them. Repaying home loan through Equated Monthly Installments (EMIs) can be highly taxing for the borrower, no matter how low interest loans one goes for. So, here are a few things and tips that one should focus in order to minimize the risks or losses while repaying the home loans.

Short loan tenure can be the right choice: The financial advisors often recommend choosing the home loans for short tenure in order to complete the repayment of loans quicker, reducing the total interest costs. It becomes important to note that high interest payout does not mean highly effective interest rate. On the flip side, it’s the absolute interest payout that increases with the tenure.

Always try to pay more than fixed EMIs: There’s no obligation that one needs to pay only the fixed EMIs. If it’s possible, one can also pay more often than the fixed EMIs to reduce the surplus amount but also the burden of interest. However, one has to ensure that whether the banks or NBFCs from which the low interest home loans are availed charge some amount for such payments or not. If those charges are higher, then avoid repaying other than the fixed EMIs. But, if those are lower, there is no harm to repay low interest home loans as per one’s financial strength.

Decide on the EMI amount that is affordable to you: Before one even borrows low interest home loans or he starts looking for one, he should decide on the EMI amount he can afford to repay. He should not expect the lenders to recommend them the EMIs suitable for them, because in the end, it’s only him who has to manage EMIs.