How To Deal With Your EMIs

How To Deal With Your EMIs

How To Deal With Your EMIs

Owning and moving into a new home can be a very fulfilling moment. Anyone who just moved into their own house would tell you how wonderful it is to step into a freshly painted, furnished brand new home. But, of course, this feeling comes at a price. If you have taken a loan to buy your home, your monthly expenses are going to shoot up with equated monthly installments (EMIs) adding in.

As the EMI amount is generally deducted from your account every month. Ensuring that you have enough funds in your account at the time when the money is scheduled to be deducted is of crucial importance. Failure to pay the EMI and cheque bounces will show poorly on your credit rating in future.

Getting ready to pay EMIs

In double-income households, loan eligibility is higher when you and your spouse apply as co-applicants. However, it is best to wait till you save a considerable amount as down payment, before opting for a home loan. However, if you are in a situation where you bought a home with a considerable amount as loan, here is what you can do:

Be positive

Investing in a home is positive step and even if there is a huge loan involved, you are saving your money in the long run.

 The brown envelope technique

Our grandmothers used a brown envelope technique to manage their finances, under which they put small sums into envelopes and label them as 'grocery', 'travel', 'entertainment', etc. An old-age system, this method requires a lot of due diligence but is very effective in managing monthly finances. You can replace the brown envelops with bank accounts i.e. the expenditure and the savings. Be vigilant on tracking and retaining money in these accounts for their allotted purposes.

Those extra bucks

Top up your loan account with extra money to help you manage in case of an emergency. You may also divert a portion of your savings account to mutual funds, demat account and recurring deposits. Also, if you route some of your salary bonuses or profits from the stock investments to your loan account, it would help you prepay your loan.


Last Updated: Fri May 27 2016

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@@Fri Jul 05 2019 13:15:19