How to Manage Your Home Loan Repayments Efficiently?
Home Loans can be one of the biggest financial decision you have ever made. As one wrong step can lead you in a major fiscal crisis, it is essential that you plan your loan prior. We all are aware of the fact that Housing Loans help to turn the dream into a reality of owning a house. Especially, if you are residing in a rental apartment, you know it better what role a Home Loan can play. However, if housing finance is not planned well, they can turn into a nightmare.
To avoid the above situation, here are some tips you can follow to manage your Home Loan repayments:
● Interest rates:
The interest rate is one of the most concerned factors among all the Home Loan buyers. Although Home Loan rates have been dropped down by the Reserve Bank of India (RBI), it can still get difficult for one to pay the monthly instalments. In order to avoid this difficulty, it is essential that you compare the lenders as well as the financial institutions and then apply for the loan. Selecting a lender who offers you a low rate of interest is extremely essential, as you don’t end up paying a higher rate of interest than other Home Loan applicants.
● Online EMI calculator:
After knowing the interest rate, calculating your monthly instalments is also equally important. There are majorly three factors that determine your EMI: the amount you borrow, the tenor and the interest rate. Depending upon these factors, you can calculate your EMIs. You can either calculate it manually or use an online Home Loan EMI calculator available on the website of your financial institution. To check your equated monthly instalments, it is essential that you fill in the digits precisely to estimate the exact interest amount. Calculating your monthly instalments can help you with your fiscal planning as well as reduce your financial stress.
● Down payments:
At times, you might come across lenders who ask for a down payment about 15% to 20%. If not so, it is advisable to pay a huge amount of down payment. Paying a large sum of down payment can reduce your interest amount, which will thus result in reducing your financial stress. It is important to note that financial institutions don’t allow you to pay a down payment amount which reduces the interest amount up to 40%.
● Home Loan eligibility:
Before applying for the loan, it is essential to check whether you fit the eligibility criteria set by the financial institution or not. You can determine your Home Loan eligibility by calculating it online. The lender checks your credit score, income as well as your Home Loan documents. In order to borrow a loan, it is necessary that you lie between the age group of 25 to 58 years, if you are underage there is a possibility that your loan application can get rejected.
● Credit score:
Since it is important to fit the eligibility criteria set by your lender, it is crucial to get updated with your credit score history. In case if you are applying for a Home Loan to the banks, then having a bad credit score can either get your Home Loan application rejected or can have a slow approval process. Where Non-Banking Financial Company (NBFCs) are concerned, they are flexible in terms of credit score. Besides having a good credit score history can help you get your loan applications approved fast. Thus, checking your credit score before applying for the loan can help you manage your Home Loan.
Following the above points can help you manage your Home Loan repayments. As Home Loans can play a major role in your financial decision, it is very important to manage and plan the loan options equally well.