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Here Is How You Can Manage Your Home Loan EMIs Smartly

Adhil Shetty


Whether you are planning to take a home loan, revising your repayment tenure, or looking to make a balance transfer, managing your home loan EMIs has a bearing on your credit score and your financial health. As you work on cutting down unnecessary expenses, sticking to a budget or increasing your income, take a look at the fundamental guidelines of managing your home loan efficiently.

 Decide On The Right Home Loan Option

If you wish to apply for a home loan, ensure you have taken the initiative to find the best lender and the ideal tenure and amount. Look for the lowest interest rates that come unattached with hidden costs or flexibility restraints. Use the EMI calculator to forecast your EMIs and plan your repayment carefully.

In case you are already repaying a home loan, consider the remaining tenure and assume whether transferring your balance to another lender for lower interest rates is worth the charges you will pay. You may just be able to avail better interest rates with the dropped repo rate or your lender may try to retain you by reducing your interest rate. This will help you reduce your monthly EMI obligation, and make managing your payments easier.

Consider Higher EMIs

Despite the fact that a higher EMI demands more of your income, you actually end up saving in the long run. Wondering how? For starters, a higher EMI implies a shorter tenure. This means lower interest expenses in the long run. It also means you get debt-free sooner. However, in an attempt to reach these goals, do not overestimate your capability. Use an EMI calculator to narrow down on the ideal higher EMI that still maintains a decent debt-to-income ratio.

Make A Part-prepayment

When you have excess income via matured investments, a salary hike or bonus, you can plan a part-prepayment on your home loan. However, do understand the terms and conditions of repayment before taking a loan. By making a prepayment, your principal is reduced, which either reduces your subsequent EMIs or reduces the tenure, which allows you to repay the loan quickly. Either way, you stand to save, and can manage your repayment better.

Managing your home loan EMIs well by paying them on time not only allows you to save money otherwise spent on interest and bounce charges, but also boosts your credit score. So, it is in your interest to constantly revise your financial strategy with every increased income or financial obligation to be able to repay your home loan without any obstacles. You can always ask your lender to increase your EMIs parallel to salary hikes to repay faster as your grow in your chosen career.

The writer is CEO, BankBazaar.com