How to Repay your home loan faster

Buying a home is a dream for many of us, but due to the high prices, only a few can afford to pay such a whopping amount. In such situations, buyers turn to banks for home loans. However, opting for a house loan is not that easy as the EMIs last for at least a decade and add to the burden for a majority.  But, don’t worry, we have listed a few tips that can help you to repay your home loan faster. You can opt for a higher EMI. It will help to reduce the loan tenure which means that the total interest that you’re supposed to pay to the lender also goes down. Further, home loan buyers also have the option to prepay the entire or part of the outstanding loan amount. Windfalls like bonus or maturity proceeds from insurance policies should be used to prepay a part of the home loan from time to time.

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Next option is that you can opt for a balance transfer. Under this option, you can transfer the entire outstanding loan amount to another lender at a lower rate of interest and other better terms and conditions. Lastly, you also have the option to maximize the down payment. Making a higher down payment when obtaining a home loan can reduce the principal amount. A lower principal amount means lower interest and EMI payments. So, in case you are struggling with debt-burden, take into account the above-mentioned steps to reduce your home loan interest rate burden. Also, don’t miss your EMI payments as it can severely affect your credit score.

 

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Top Up Loan vs. Personal Loan: Which is Better

An additional loan amount availed on your existing home loan is referred to as a top up. If you have recently availed a home loan and you require funds for renovation or extension of your house, then you have two options either you can avail top up on existing home loan or you can apply for a personal loan.

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Top up loan is a better option because its approval and disbursal process is quick as you are an existing customer of the bank. Top up loan is available for a longer tenure i.e. the remaining tenure of your home loan, whereas personal loan can be availed only for a period ranging up to 5 years. Interest rate on top-up loan is low in comparison to a personal loan. Amount of loan in top-up loan is decided based upon your existing home loan outstanding and in personal loan you can apply for loan amount as per your requirement. You should opt for a top-up loan if you require funds immediately also your fund requirement is not high. On the other hand if your fund requirement is high and you can bear the burden of extra resultant EMI, then you can apply for a personal loan.

RELATED: Top Up Loan vs. Personal Loan: Which Option Should You Back