Are you shifting to the home of your dreams? Excited? Yay! We, too, are happy for you! For meeting this dream, did you avail a home loan? Yes, you did. It is awesome. No matter whether you avail of an HDFC Home Loan or ICICI home loan, you must manage it well.
Finally, moving into your own house is nothing less than a fantasy come true moment. Now, you can finally make the decision of what color walls you want, what interior design theme you must opt for, and so on. Moreover, there will not be any interference from your landlord constantly to either reduce the stereo volume or keep the home in a particular way, etc.
You can do whatever you want to, and this is great. While you make the preparations for all the home warming functions, along with making the list of whom you are looking to invite, you should also know how you can manage your home loan. Purchasing a home loan comes across as a milestone in life. And hence, you must make this memorable. How? Just by knowing what you are doing with your funds and how you are managing the home loan burden, you will make things extremely easy for yourself.
Once you are done with all the joy and festivities of moving to your new home, you realize something. Not pleasant, maybe. However, you realize that you are supposed to repay EMIs for a fixed period just to own the home you purchased. Unless you are a millionaire & you do not care about funds at all, it may frustrate you.
However, you have something most others do not. You have this article. Read on to know the management tips:
Money Management
Now, as you have a home loan, which you must repay on time, it becomes extremely crucial for you to manage your finances. A vital part of doing this is by getting your fund management skills in order. You cannot continue messing up with money and then put the blame on the situation, people, and others. Do not worry!
For the starters, you require making a list of the places you have parked or invested your funds. This must include all the investments you have made like your PPF, EPF, postal deposits, ULIPs, etc. The major point here is you should know where your funds are and where they will go. If you invested in an instrument that is offering lower interest, you must close it and concentrate on prepaying your home loan in place.
Saving a good amount of interest constituents is a better option than randomly investing your funds in places giving you lower returns, isn’t it?
Go For A High EMI
Repaying a high home loan EMI can assist in managing your home loan in a better way. Opting for a higher monthly repayment can assist you to lower your repayment tenure. As an outcome, the overall interest that you are supposed to repay the lender even goes down. So, technically stating, by choosing to repay more each month, you are lowering your financial burden. Additionally, it assists you to lower your loan repayment tenure too. Opting for a lower repayment tenure allows you to get sufficient time later to concentrate on other crucial life events — for instance, your retirement planning. You must think about that also.
Do you want a worry-free, happy retired life, don’t you? So, why not repay your ICICI Home Loan as early as possible this is the best way to make way for important things in your life.
Partial Prepayment. Heard About This?
In place of following the normal EMI process and repaying a fixed amount towards a home loan each month, you can take the route of prepayment. You can use any of your one-time income for prepaying your home loan. For example, if you received a promotion recently or if your bank fixed deposit is maturing, you can utilize the free cash for prepaying your loan. It will not just help you lower your loan obligation; it will also lower your repayment tenure.
Likewise, as we stated before, repaying your home loan early can leave plenty of free time and resources for you to plan out other things in the future. The best thing is most of the top banks do not ask you for heavy charges when you avail of the loan repayment option. Even if few do, their charges will be minimal. However, to be on the safer end, you should always ensure to enquire about prepayment fees before availing of a specific loan offer.
Switch To The Lower Interest Rate
Ensure to always keep your eyes open and monitor the interest rate trends. As soon as you view a fall, you should think about switching to a lower interest rate than the existing one. Depending upon the rate of the interest reset period, distinct banks usually lower their interest rates at distinct times. In case the reset interest band of your lender is wide, you might have a high rate for a longer duration, after which the bank will begin to lower their rates. Thus, the magic lies in being totally aware of what is happening in the home loan market.
Switching to a lower rate of interest than your existing rate will lower a few years from your loan. You still require being careful. Why? Do not jump a lot of times or with low-rate differences. If you are getting a massive dip in rate, you must consider switching. However, if the difference is not a lot, it may not be a good idea to opt for the switch.
If you ensure to keep all the above-mentioned points in mind, then managing your home loan will be simple. It is all linked with managing your funds the right way. If you can do it, there is no chance whatsoever that you will miss out on your EMI repayments.
Still not applied for a home loan? Go ahead now but keep in mind to manage your budget well.
