Want to lighten your shoulders by closing your house loan early? You can do that in easy ways like going for home loan prepayment. Here are 5 easy ways to clear your loan repayment faster.
Choose a Short Loan Tenure
A long home loan repayment tenure means lower EMIs. However, if you can afford higher EMIs and don’t want to pay the interest over a long time, you can readily opt for a short tenure. Then you repay your loan early and have peace of mind.
Use the EMI calculator online on the official website of the bank. Choose different tenures and compare the resultant EMIs. Finalise the tenure that is short enough and also comes with a payable EMI amount.
Make a Large Down Payment
A home loan offered by the best bank can cover up to 90% of the cost of the property you want to purchase. You have to pay the bank the remaining 10% of the value of the property upfront as a down payment.
However, there is no maximum limit to this payment. So, if you have saved well for your new home purchase, see if you can afford a large down payment. This can help reduce the loan amount and also the time needed to pay it off. Then you can close the loan as early as possible.
Increase Loan EMIs with Time
The best bank for home loans offers a long repayment tenure of up to 30 years. If you are a salaried borrower, you can expect your income to increase over this long period. Even the business of a self-employed borrower may grow over time. Then who knows? You may be able to afford to pay higher EMIs much before the tenure expires.
In that case, try to increase the EMI amount as much as you can without encountering a liquidity crunch. Soon before you realise, you may have repaid the whole loan!
Opt for Prepayment
Do you have surplus funds to repay the loan in part or full before the expiry of the loan tenure? Then check with the bank whether you can make a home loan part payment or full prepayment or both. If there are no home loan prepayment charges, it can be the icing on the cake!
Now request the bank to shorten the loan tenure and keep the EMI amount intact. Then you can pay the outstanding amount quicker.
Choose Balance Transfer for a Lower Interest Rate
The best bank for home loans offers a fast balance transfer of your existing loan from any bank, NBFC or HFC. If your present loan has a high interest rate, perhaps that was making it difficult for you to close the loan fast. Then transfer its balance to the bank offering a lower interest rate so that the EMI reduces and becomes more affordable. This will help you repay the loan earlier.
Consider using these tips to close your house loan quickly and finance the purchase or improvement of a property faster!