India Markets close in 5 hrs 48 mins

How To Effectively Manage Your Home Loan EMIs In 2020

Adhil Shetty
Photo: Pixabay

A house is usually the biggest investment of our lifetime, which also means its loan EMIs are the biggest financial commitment for most of us. Dealing with the repayments effectively month after month requires a lot of financial discipline, which, truth be told, isn’t something all of us can boast about. So, if you struggled with your finances this year and want 2020 to be less stressful, learning to effectively manage your home loan EMIs should be high on your agenda. Here are some tips you would do well to consider.

Manage Your Budget Wisely

The first step to controlling your expenses is to create a budget that is practical and stick to it. This will require a great deal of financial discipline which will not seem so difficult when you think of the payoff, which is owning your own home at the end of the day.

If you schedule your EMI payments closer to your salary date, it would ensure that not only are your EMIs payments taken care of at the start of the month, but that you now have to manage your expenses and savings with only what you have left. This will force you to stay within your budget.

Tracking your expenses will help you know where you can save money in future. You could leverage one of the many budgeting apps to help you with this. These apps can support you by tracking your expenses, creating a budget, providing alerts for due bills, reporting on your credit score, and even providing tips for better financial management.

Opt For Prepayments

Another way to manage your EMIs is to make prepayments as and when possible. Any influx of cash that you get, whether it is from your mutual funds, annual bonus, or a gift from family, can be used to prepay your home loan EMIs. This will help to reduce the repayment tenure and overall interest payment, while also increasing your credit score. However, do check about the prepayment charges with your bank for clarity.

Plan For Your Discretionary Spends

Discretionary spends, which are sometimes unavoidable, can impact your budget negatively if they are unplanned. Whether it is festive shopping for the family, a year-end holiday, or a home appliance or gadget you desperately need, these are things you can enjoy without it affecting your budget if you plan ahead and save wisely.

Look For Ways To Increase Your Income

If your budget leaves you with very little room for savings or discretionary spends, then it may be time to look for other avenues to augment your income. Leverage your skills, talents, and passions to generate alternate income streams. Monetise your free time or free up your time to make room for additional income. There are many ways you could do this today, whether it is through online tutoring, blogging, freelancing, or consulting. Make sure that the surplus income generated is saved smartly, whether it is for taking that holiday without dipping into your salary or to make a prepayment on your home loan EMI.

Transfer Your Loan To Bank Offering Lower Interest Rate

Despite availing a home loan, you should always keep a watch on interest rates offered by other banks. This would keep you updated about the interest rates and would also give you an opportunity to switch to a lower interest rate through balance transfer option, which will bring down your EMI. Before availing this service, do check with the bank on whether they offer balance of transfer service.

Your home loan EMIs need not be a cause for concern in 2020 if you implement some of these budgeting and planning strategies.

The writer is CEO,, India’s leading online marketplace for loans and credit cards.