Perhaps the excitement of moving into your new home might be overwhelming in itself, and why wouldn’t it be? After all, it’s all about the prospect of a new beginning from where your life might be enjoyable and your social status can be prestigious. But that’s just the rosy and balmy part: the real challenge lies in managing in home loan. It would be pretty unwise to ignore this aspect, at the cost of falling into an inescapable circle of debt and repayment. To steer clear, here are some tips on efficiently manage your home loan. Not only would it prove itself to be less of a financial burden, it would help you to maintain a check on your financial assets and how much you slave them to create the home of your dreams!

The first thing you need to realise is that you need to pay a fixed sum as the EMI for a set period of time, just so that you’re able to own the house you’ve bought. This should be your first priority and concern, unless if you’re a millionaire who wouldn’t have to care about spending a fixed sum of money in maintaining and actually possessing legal ownership rights of your home. This is actually the be-all and end-all of the manner by which you manage your home loan. Given that you have us, let us allow to offer you some helpful tips (which are, for every purpose, hacks) in meeting the challenge your home loan presents:

1. Managing Your Money:

Now that you have borrowed a home loan, it becomes all the more important that you seriously consider on managing your finances well. This can be done if you’re able to put your money management skills in order, for you can’t always blame circumstances, people and other things for messing your allocation of fiscal resources. To start with, you need to list the places where you have listed your money in and it should, first, include all the places where you have invested, for example, EPF, PPF, postal deposits and even ULIPS. The essential point is that you know where your money is and where is it going to go. If you have invested in plans that are making you pay an unnecessary amount of interest, you should put a closure on such investments as soon as possible. Your entire focus should entirely be on repaying your loaned amount. After all, saving a significant amount of interest is vastly preferable than paying at places that don’t even have good returns for you, in the bargain.

2, Yes to High EMIs:

On the surface, this might look like a crazy idea. But hear us out: this would enable you to manage your home loan better, even if this involves paying a high amount of money per month. This is because taking this route would actually reduce your loan tenure, and consequently, the total amount of interest you pay to your lender goes down. So, weirdly enough, by choosing to pay a higher EMI, you’re actually reducing your financial burden. Moreover, this allows you to focus on other important things once your loan has been repaid. For example, not only would you be able to plan for your retirement but would also ensure for yourself a happy, worry-free retired life.

  1. Partial Pre-Payment:
    Another option available to you is, instead of going for paying a fixed amount as EMIs every month, you could actually opt for pre-payment. You can actually use one of those one-time incomes to pre-pay for your home loan. For example, if you have recently got a promotion or one of your fixed deposits has matured, you could use all of that free cash and pre-pay your loan. Not only would this reduce the obligation you’d have to your loan, but it would reduce your loan tenure as well. In this way, you kill two birds with a single stone. Just to be on the safer side of things, it’s always a sign of intelligence if you ask your lender about the amount of prepayment you need to pay.
  2. Go Low:
    Opt for a lower rate of interest, and in order to do that, you need to be really vigilant abound the ups and downs the interest rates tend to face from time to time. Usually, banks reduce their interest rate depending upon the period in which interest rates can be reset. You can expect to remain at a higher rate of interest if the reset period of the interest rate is wide. Hence, by being vigilant and by being aware of the market mechanisms of the market, you can switch to a lower interest rate with ease. Doing this would reduce the duration of your loan period. However, as with everything that deals with finances, caution has to be necessarily exercised. Why? Although it’s a good idea to go to a low interest rate when the market shows signs, if the difference between your previous and new interest rates isn’t too great then switching in the first place would have been futile. Hence, an intelligent and dedicated consideration is mandatory before taking this decision.
  3. Getting the Math Right:
    We understand that understanding commercial maths can be dicey, to say the least. However, calculating aspects of a loan involve a very different kind of math. It’s for this very reason that there exist loan calculators, which take the inclusive variables into consideration while determining a great number of things, like loan amount, interest rate, loan tenure, et cetera. A couple of questions are asked beforehand to assess and ascertain your financial situation. The best part about them is they are simple, convenient and easy to operate. And as if that wasn’t enough, these calculators – after calculating the specifics of your home loan – also advise you on the kind of home loan product that you should chose; for you should take the loan that you can easily and realistically repay on time. Getting all your loan-related calculations done in one place is highly beneficial; since you’re able to properly ascertain the monthly EMIs you have to pay to repay your loan.
  4. Don’t Miss Payments:
    No matter what, payments for your EMI should not be skipped at any cost, and that too even when your financial situation is precarious. Why? Not only is this a good habit, but paying your EMIs regularly – and without fail – is very important for improving your credit score. Quite obviously, failure to pay your EMIs on time can adversely affect your credit score, and it’s a situation you should preferably avoid, as a bad credit score invites non-sanctioning of loans by various lenders. A good credit score reflects a good credit history, and this is what lenders would ultimately want to see if they consider on really granting you your loan.

We hope that these tips will help you manage your home loan better. You can always visit for more tips and information on ways to improve the manners in which you handle your home loan.