4 Tips To Reduce Your Home Loan Tenure As EMI's Start Stretching Beyond Retirement age
Home loan repayment tenures have become longer owing to repo rate hikes in the last one year
Recently, banks increased their interest rates which means that for the salaried person, the burden of EMI will increase too. In today’s modern world where our salaries dictates our lives how is it possible to keep up with the increasing prices in everything? How it is possible to plan savings, investment or set aside funds for insurance policies? Fortunately, there are some measures borrowers can take to reduce their home loan tenure if EMIs are straining their retirement plans.
By refinancing or opting for additional top-ups on existing loans, borrowers can reduce their monthly premiums by achieving a lower interest rate and extending the repayment period for the remainder of their overall loan amount.
Here you can find the best tips that can help you in identifying the best ways.
Close The Loan As Soon As Possible
It is important to close the loan as soon as possible to reap the full benefit of a home purchase. By increasing the tenure of the loan, you may end up in an unending debt trap.
It will not only give you immense peace of mind but also enable you to make the most out of your property by selling it off at a higher price than what you bought it for.
On the contrary, when you have taken a very long-term loan it may result in a major difference between the interest rates and the actual market value of your house and thus reducing your gain in case you wish to sell off your house later.
Moreover, increasing EMIs can become quite difficult if one goes through financial hardship due to any changes in their personal or economic situation.
Hence, one should try their level best to close the housing loan either by prepaying some amount or taking other measures that allow them the financial flexibility to close down the debt completely.
The relaxation in terms of the financial burden and increased profit margin are both good reasons that underline why closing the loan as soon as possible is necessary if one wishes to keep living comfortably without any fear of a permanent debt trap.
Negotiate With The Lender
Negotiating with the lender is an important step when it comes to managing loan repayments and paying back debt. When dealing with a lender, it is important to express any worries or concerns you may have about not being able to afford your loan payments on time.
Negotiations can come in many forms such as increasing the amount of EMI requested instead of agreeing to increase the tenure, or even negotiating for a lower interest rate if your credit score qualifies. However, you must speak directly with your lender and come to a friendly agreement that works for both of you.
Loan Refinancing
Home loan refinancing is a great option for people looking to manage their EMI tenure without taking too heavy of a burden. Refinancing can potentially help borrowers lighten the load by transferring a sizable portion of the loan amount to another lender at lower interest rates.
This allows individuals to plan out a more comfortable EMI schedule which makes it easier for them to have a peaceful retirement. Additionally, having an additional co-applicant with regular income can make the refinancing process smoother as lenders may be more willing to extend the tenure of such loans.
Therefore, if you feel your existing home loan is becoming too much of a financial burden, then try exploring refinancing options with both your existing and potential lenders.
Compare the available terms and opt for the one that best suits your needs in terms of convenience, rate of interest, and term period. Consulting with an expert or taking advice from other homeowners would also help make informed decisions about refinancing your current home loan.
Partial Repayment
Prepaying for a loan can be an excellent way to reduce your interest burden and shorten the repayment period. Even if you don't have much disposable cash, you can still prepay by setting aside a small portion of your income each month. By saving this money and applying it towards your loan balances, you're effectively reducing your principal as well as the amount due on future payments.
The benefits of loan pre-payment include improved credit scores and reduced financial stress. Collateralized loans like mortgages may also gain tax deductions for prepaying the loan amount. Therefore, borrowers should consider their situations before taking any action about their loans and make sure that they know all the benefits and drawbacks involved in pre-payment before proceeding ahead with it.
