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HOW YOU CAN PREPAY YOUR HOME LOAN EASILY?

Posted on Wednesday June 9th, 2021

Getting in debt is never good because it can adversely affect your financial health and credit history as well. The prepayment facilities on a home loan offered by various lending institutions make it convenient to lower down the EMI burden making the loan journey stress free for borrowers. If anyone avails the facility of prepayment after he/she Apply For Home Loan then it will help him/her to reduce the interest burden which in turn helps to reduce the total cost of your borrowing.

A home loan prepayment means for repaying your home loan before the fixed tenure. It can be paid in two ways either completely or partially. Thus you prepay your home loan, it reduces the EMI. You also have an option of reduced tenure instead of reduced EMI while going for a home loan prepayment. It is advisable to go with it when you have surplus amount of cash with you.

Basically, you can prepay a loan when you receive your bonus from your company or any of your investments get matured. Most of the home loans have long tenure and therefore, borrowers need to pay a lot of interest rates adding up more to the overall cost of borrowing. So, by repaying the loan before its tenure can save you a lot of amount that you would have consumed on interest.

Looking at the benefits of prepayment you must be wondering how you can prepay a loan. Well, one can start with a small prepayment amount and keep adding gradually, this will help you observe the benefits and will motivate you for the new loans in future. Take a plunge into some ways which will help you to prepay your home loan.

Savings: Availing a home loan is a largest investment for everyone which lasts for minimum of 10 to 15 years. It is always good to save some amount on normal basis after paying the monthly installments. By saving this small amount for few months, you can use this amount to prepay your home loan reducing the EMI as well as tenure on your home loan.

Reduce tenure by increasing EMI: If you cannot accumulate funds by savings, you are still able to prepay the loan before tenure by increasing your monthly installments. By increasing the EMI, your loan will end soon and on the other hand it will save you a lot of money on interest rate charged by the lender.

Set the goals: As prepayment of loan, either you Apply For Home Loan Online or offline, it will ensure you a peace of mind but you should not ignore other goals as well. Along with prepayment of loan, one needs to set other financial goals to achieve financial success. It will not help you to stay motivated but also helps you to realize your financial mistakes. Moreover, it also helps you to have a clear vision to achieve your financial goals.

A prepayment should not be your single goal, focusing on other goals such as retirement and children’s education is equally important.


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HOW TO GET HOME LOAN APPROVAL IN FIRST GO?

Posted on Wednesday April 21st, 2021

The biggest motivation to work hard and to save money in everyone’s life is to buy his/her own home. Buying a home is the biggest invest that comes with a financial commitment where you have to analyze your financial capacity and need to work on it. As per the current inflation in every sector, buying your own home with your saving is also a tough job and for that reason most of the people Apply For Home Loan to fulfill their dream. Applying a loan can be easy process but your loan approval totally depends upon your age, income, job stability as well as loan repayment capability.

To reiterate, eligibility criteria play a crucial role as home loan is a big financial commitment which comes with longest repayment period ranging from 15 to 20 years. Thus, the home loan lenders become much stringent while approving the home loans. If you are planning for a home loan in near future then you are advised to take some preparatory steps. To get a home loan approval in first go, you need to do some home before applying for a loan. Here, we are listing few tips to get your home loan approval in first attempt:

√ Plan a budget for Homeownership: While purchasing a home, you do not have to bear the cost of house only but there are some additional expenses while getting a loan that includes registration fee, stamp duty, GST, and charges payable to municipality. Therefore, you need to consider all these expenses involved in home purchase while planning a budget.

√ Check your credit score: Credit score is that numeric expression provided by credit bureaus based upon their credit history reflecting their financial health. A score above 700 is considered to be good representing a high creditworthiness. In case you find your score low, you should take some considerable steps to improve it before going to lender as it will minimize the risk of loan rejection.

√ Get prepare for the down payment: No home loan covers the entire amount of the property to be purchased. You need to pay a certain part of it from your pocket or savings which is known as down payment. The maximum amount one can secure from a home loan is about 80-85% of the property price. Hence, the remaining percentage of the entire cost is covered under the down payment. Since the property price is a bigger deal so arranging small percentage can also become difficult for many of us. Thus, try to get prepared for it as it makes loan approval easier.

Purchasing your home of dreams not only indicates your financial reputation but also has some of the sentimental values such as sense of pride, stability and security. Therefore, before stepping ahead to Apply For Home Loan Online or offline, you should start preparing to meet the eligibility criteria to own the home of your dreams. Thus, to get prepared and to make sure the smooth home loan approval, one should follow the above mentioned tips.


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WHAT ARE THE PROS AND CONS OF JOINT HOME LOAN?

Posted on Thursday March 4th, 2021

Joint home loan is one of the best financial products by lending institution to hedge their mortgage risk. Most of the lenders insist on joint home loan these days, even if the property to be pledged is bought in a single owner’s name. The key advantage of taking this loan is the home loan tax benefits and the other thing that is quite interesting, adding your earning or non-earning spouse as a co-applicant. If you Apply For Home Loan jointly, it makes your repayment capability higher. As every cloud has a silver lining, so do the joint home loan. Let us understand the pros and cons of this loan which are mentioned below:

Advantages of Joint Home Loan

♦ Higher loan quantum: You can apply for loan jointly with your partner, siblings or children to get your loan quantum increased substantially. Every lender sees the borrower’s net monthly income and then finalizes the loan money to be disbursed. Usually, the lending institution would offer a loan on which the monthly installment could be as high as half of the monthly income.

♦ Tax benefits: If your co-applicant is co-owner of house with you, then you can both claim the tax benefits. There is deduction from the taxable income on both the principal repayment as well as interest to be paid, hence, bringing down the overall tax liability of borrowers. Therefore, a home loan jointly allows co-applicants to double the tax deduction benefits from a single housing loan.

♦ Flexible repayment: If you are applying for home loan jointly, it is not necessary that both the applicants have to repay equally towards the principal amount and interest payment. It entirely depends upon the borrower to decide how much each of the borrowers contributes towards EMI.

Disadvantages of Joint Home Loan

♦ Delayed Documentation: As the two applicants Apply For Home Loan Online or offline, so lender will take more time to complete the documentation check. This time lapse occurs as authorities take longer time to ensure that documents submitted by applicants are genuine and not forged. The entire process of document verification is repeated two or three times depending upon the number of co-applicants who have applied for loan.

♦ Impact on CIBIL score: As the joint home loan gives you the advantage of flexibility on repayment but it also have a disadvantage because if any of the two applicants defaults on repayment then the credit score of both of the borrowers would face the brunt as any default on the EMI could negatively affect your credit history.

♦ Divorce or Demise: In case if the co-borrower decides to move out of a loan due to divorce then it is the responsibility of first applicant to repay the whole loan. In other case, if one of the co-applicants passes away then the surviving spouse have to take the charge of repaying the entire loan amount. It is advisable to avail separate life insurance policies to decrease the financial load on one applicant in case of demise or separation.


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WHAT ARE THE TRICKS TO PAY OFF YOUR HOME LOAN FASTER?

Posted on Monday January 11th, 2021

A stress-free life is a dream of many individuals, where everyone wants their own home outright and pockets full of cash. Well, it is not easily possible but you can achieve this dream just by following good financial habits. One of the easiest ways to achieve your goal is by paying the mortgage and loans with high interest rates faster. Paying off your loan faster will help you reduce your financial burden. Moreover, it will help you to get safe from default so that you do not have to spend on late payment charges.

Home loans are the big liabilities which always stretch from 20 to 30 years for most of the borrowers. During the loan tenure, the borrowed principal amount becomes much more as the huge amount of interest rate is added to it. The home loans have lower interest rate so people often go with a long tenure but rate of interest keeps on adding for a long time which becomes double or even more than the borrowed amount. Therefore, the best way to get rid of this burden is to pay your Home Loan as soon as possible. Here are the possible ways by which you can pay off your home loan faster.

→ Look beyond big banks: Do not choose the renowned financial institutions as small lenders can do the wonder for you. The small lenders may provide you more personalized service and some festive offers as well which may include longer loan tenure, lower interest rates and ongoing fees. Some of the other advantages which one can get with NBFCs and small lenders can be higher lending ratio, minimal documentation and low processing fees.

→ Make frequent payments: Most of the lenders allow frequent payments to the borrower. You just need to check for this while selecting a lender. You can ask for such facility and can make payments after paying the EMI. The interest rate on home loans is calculated on daily basis and making the frequent payments can help you to reduce the burden of interest which you will be paying over the tenure of your loan.

→ Make a big down payment: Making a huge down payment on your home loan reduces the principal amount which leaves you with fewer burdens. It results in paying less interest rate, therefore overall repayment. A big ticket down payment reduces your debt obligation in comparison to other home loans. The repayments become much easier when you have a low principal amount.

→ Home loan refinancing: If you found something more convenient and affordable after reviewing your home loan, the home loan refinancing can help you to grab what suit you the best. Try to negotiate the interest rate with the existing lender or go with a new lender who offers you a low interest rate as it can save you a lot of money. Use a home loan EMI calculator for detailed calculation and to know the total borrowing cost which suits your requirements.

Some quick tips to save money:
• Save sufficient amount of funds to make down payment before you Apply For Home Loan.
• Opt for a loan quantum which could be easy for you to repay.
• Pay your monthly installments and credit card bills on time.
• Utilize your bonus or other profits from your investments to make partial prepayments.


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HOW TO MAKE YOUR HOME LOAN EXPERIENCE BETTER?

Posted on Friday October 2nd, 2020

It is important to find a perfect home, but finding an ideal home loan is equally important too. There are innumerable lenders in the country that will be willing to lend you money against home loan but the important thing to decide is who should you borrow from? Every housing loan you zero in will require your financial commitment for a long run. Therefore, we have mentioned some tips for you that tell you how to make your home loan experience better as it is one of the biggest financial decision of your life.

Save early for the down payment: It is crucial to plan your finances before taking a home loan. You should lay out a monthly budget first and start saving a certain amount of cash that can help you to pay down payment. The down payment is the 20% of the purchase price of the home depending upon the home loan and lender you choose.

Maintain your Credit Score: A good CIBIL score attracts a great deal on home loans as it reflects your creditworthiness to the lender and for that you must have a good financial history. Keep a check on your credit report; get a copy of your credit history to see how your credit profile looks like to the lender.

Hold your financial documents in place: While you Apply For Home Loan you need to provide number of financial documents to the lender. These documents needed to be ready beforehand because it will help you to accelerate the processing of your home loan application. These documents may include last 6 months pay slips, tax returns and bank statements depending upon the requirements asked by lender.

Compare the various lenders: Don’t be fooled by the lending institutions offering lowest interest rates. There are some other facts like processing fees, hidden charges etc. that can make home loan more expensive. It is advisable to check all the aspects of home loan charges so that it can be easy on your pocket and makes your loan journey stress-free.

Use a loan calculator: When you Apply For Online Home Loan or research for various lenders, there are numbers of lending websites having an important tool as loan calculator which help you understand how much you can afford. It enables you to calculate your monthly installment with different home loan rates, down payments etc. You can use it to determine that how much you should be borrowing considering your earnings.

Read the terms and conditions carefully: While signing the documents for home loan, make sure to read each and every clause written in the home loan agreement. The terms and conditions applied in agreement must be read carefully before signing any document.

Always observe the above mentioned tips while you apply for online or offline home loan. Don’t be hurry for any decision making, check your loan eligibility criteria with lender and get the deal that best suits you and makes your home loan experience better and hassle free.


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SOME SMART WAYS TO PREPAY YOUR HOME LOAN

Posted on Saturday August 22nd, 2020

Owning a home is something special that all people tend to with their hearts. It is one of the biggest investments of life where you will end up spending most of your time as your family will grow in it and so will you. Every rich and poor wants to have their own house and to get so, they opt to choose a home loan to fund such big purchase. Taking a home loan is easy and convenient but it is more important to clear it as soon as one can. You can’t spend your half of the age in paying back the home loan. Here, we have discussed some smart ways to prepay your home loan and it will be possible if you plan well.

• Choose a loan with part payments: When you receive a loan initially, it is based upon your income and credit score but over a period of time, your income will increase and in turn your affordability. If you have taken the loan for the maximum tenure, you are allowed to repay more over a period and finish it off before tenure. Always check for the lenders that offer pre-payment feature that you can pay more than the EMI when possible.

• Change your installments amount as your income increases: Every person in their life grows their career and so does their salary. Make sure that you must increase the loan installment as your income increases which will reduce the interest rate efficiently. At that point, lender will help you in reconstructing your loan as per current salary of yours resulting in strengthening of your creditworthiness.

• Always aim at prepaying the loan: When you plan to Apply For Home Loan you must set some money aside to make the down payment. If you take a loan with prepayment features, then divide your investments accordingly. Everyone has specific goals regarding their investment plans so clearing a home loan should also be one of them.

• Invest in SIPs to prepay the home loan: If you start investing in mutual funds at early age, you can accumulate a great quantum over a period of 10 years or so. You can use the chunk of money from these funds to clear off the considerable amount of your home loan before the tenure ends. Investing in SIP’s also helps you to save on taxes resulting in double profit.

• Use your other income sources towards the prepayment: There are great chances of acquiring other sources of income either a rent of property or other variables from work area. This extra income can be directed towards prepaying the loan.

A smart tip to Avail Home Loan is to start your search wisely and prepare yourself for good amount of down payments. Nowadays online home loans are popular in lending market which offers you doorstep services, customer support and you can also check your credit score also. Always remember prepaying your home loan not only relieve your financial burden but also gives you the space to plan for other financial investments.