This Is How You Can Repay Your Home Loan With Ease
When saving for a home loan, plan on increasing the down payment over and above the limit that needs to be paid.
Here are certain ways in which you can repay your home loan with ease:
Time the purchase
Buy when developers promote the sale of property with attractive discounts. This typically happens during the period before interest rates begin the downward trend or during festive season.
Time your loan purchase
You should take a home loan when interest rates begin the downward trend to cash in on the falling rates, which will help you lower the interest cost of your loan.
Partial prepayments can decrease the tenure closing the loan early
You can use part of your savings to prepay the loan thus, reducing the tenure. If your loan amount is well within 40 per cent of your income, you could easily set aside money to prepay at regular intervals.
- From your savings try and set aside 10- 20 per cent of your income for home loan repayment
- Accumulate this amount every three months and make a quarterly prepayment
- With most housing finance companies (HFCs) and some banks having done away with pre payment charges, this is a good incentive to prepay. Even if there are pre-payment charges, please note most banks do not charge a penalty for partial prepayments up to a certain limit. Verify these details before you plan your loan prepayment and make the most of the specifications for prepayment.