Top 5 Proven Tips To Clear Home Loans Faster In India
Clearing the home loan is an important part of the home buying process. It needs careful financial planning and thorough considerations. The smart home loan guides always highlight the importance of the home loan clearing process since repaying is the most crucial part of the home loan process.
There are certain techniques that can help you to clear the home loans early. Following these effective techniques will allow you to not only find the right track for clearing the home loans early but also alerts you to the common mistakes that can lead to financial burdens.
So, here are some of the proven tips that can help you to clear Home Loans faster in India.
Paying Higher Down-Payment:
Paying a higher down payment can help you in clearing the home loan in several ways. The higher down payment reduces the applicable monthly EMIs to be paid. It also reduces the net interest payable on the home loan amount. Paying a higher down payment enables you to manage the finances better during the home loan tenure.
Besides, paying a higher down payment makes you eligible to take advantage of impressive offers given by the developers.
Paying The Higher EMI:
Paying higher EMIs results in lower net payable home loan interest. This is because paying the higher EMIs reduces the home loan tenure and hence results in the lower net payable interest rates on the principal home loan amount. Also, it means that you can clear the home loan within a short period of time.
Now, you also need to be careful on how much EMIs will be perfect to manage finances. Setting up higher EMIs will put an extra strain on the personal finances and on the other hand setting lower EMIs result in paying the higher net payable interest rate.
Timely Payment Of TheEMIs:
It is necessary to pay the EMIs on time to avoid the penalties imposed by the banks and the financial institution. If you delay the EMIs payment the extra interest rate of 2% or more is applicable. And if you keep delaying the net amount keeps increasing exponentially.
Besides this, not paying the home loan on time has a negative impact on the overall credit score. This becomes the biggest obstacle while applying for home loans in the future.
Get The Tax Benefits:
There are tax benefits on the home loan principal amount and the net interest payable. The government takes the initiative and makes policies that favor home buyers. The primary relaxation that these policies provide is on home loans.
Under section 80 C of the income tax, first-time homebuyers can get the exemption of ₹ 1.5 Lakh on the principal amount of the home loan. Besides this, section 24 B allows you to avail the tax benefits of ₹ 2 Lakh on the net interest payable. By getting these tax benefits you can reduce your financial burden and effectively repay the home loan amount.
Home Loan Balance Transfer:
Home Loan interest rate plays a crucial role in clearing the home loan. The floating home loan rates keep changing depending on the market condition and the RBI benchmarks. There are possibilities that the home loan interest rates will increase due to various factors. There might be a case where your home loan lender is charging more interest than the other banks. In such a case, you can transfer the remaining home loan to a bank where the interest rates are comparatively lower.
For transferring the home loan from one bank to the other, you need to consider some important things- First, what are the Home Loan Balance Transfer Charges. And second. Whether the new interest plan will ensure a significant amount of savings. If the new interest rate plans are considerably lower than the current interest rates, transferring the home loan can be a great option.
Clearing the home loan needs constructive financial planning. There are certain things that you can follow home loan guides to clear the home loans faster. This includes Paying Higher Down Payments, Paying The Higher EMIs, Timely Payment Of the EMIs, Tax Benefits, and the Home Loan Balance Transfer. On the right implementation of these techniques, you can clear the home loans faster.