One should opt for auto-debit for loan repayment, guaranteeing EMI deductions on your payday and averting late payment penalties.
A home loan serves two key purposes- enabling home ownership and providing tax benefits. But it has a substantial impact on both current and future financial well-being. Therefore, it’s commonly advised to speed up the repayment process of a home loan. Let us take a look at six easy ways to pay off your home loan faster.
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Balance Transfer
To expedite your home loan repayment, consider transferring your loan balance. This involves moving the remaining loan amount to a different bank with a lower interest rate for home loans. Lower interest results in reduced Equated Monthly Installments (EMI), facilitating faster loan repayment.
Timely EMI Payments
Late EMI payments for home loans can result in bank penalties and higher debts. Opt for auto-debit to accelerate loan repayment, guaranteeing EMI deductions on your payday and averting late payment penalties.
Avoid Taking Additional Loans
While you have an active home loan, it’s prudent to steer clear of obtaining additional loans unless it’s an emergency. Accumulating debt through credit cards and various personal loans can disrupt your overarching financial strategy, leading to possible missed home loan EMIs and, consequently, an increase in the overall loan amount.
Save Money and Repay Loan First
Choose to save and allocate any extra funds toward making extra payments on your home loan, rather than spending them on unnecessary expenses. This practice effectively reduces the loan balance, leading to lower interest costs and a sense of financial relief.
Prepayment
You can speed up the loan repayment process by making an extra lump sum payment. This involves a one-time payment of a substantial amount to the bank, which covers both the interest and principal balances. This approach is commonly used by many borrowers.
Shorter Tenor
Consider selecting a shorter loan tenure to avoid prolonged mental and financial stress often associated with longer durations. While this may lead to higher EMIs, it results in significant interest savings over the loan’s lifetime. Ensure this option aligns with your budget and financial preferences before choosing it.
Summing up
Achieving your dream of home ownership sooner is very much possible. Making regular and punctual payments, choosing higher EMIs, and taking advantage of tax benefits will help you progress toward repaying your home loan quickly. Think about refinancing, utilize deductions, and uphold financial discipline in your budget and financial planning.
