Ways To Pay Off Your Home Loan Faster in Thrissur

Posted onAug 27, 2024

There are several advantages of taking a home loan, like being able to purchase premium properties, not having to pay the full amount at once, tax benefits, and so on. You need to repay the home loan in small monthly payments called equated monthly instalments or EMIs. However, they form a major chunk of expenses, and the sooner you can pay your loan back, the better. Let’s look at how you can do that.

Higher Initial Payment

Paying a higher sum initially and choosing a lower loan amount is one of the best ways to be able to pay off your loan quickly. Of course, this depends on the disposable funds you have. If you can pay something like 20% of the property value or higher, it will serve you well.

Short Tenure

When you take a long-term loan, you pay smaller amounts every month, but in the long run, it means paying a lot more money as interest - this is one of the most important things to know before getting a home loan.  Which means, you are paying more to borrow. If you opt for a short tenure, you pay a lot less interest, which means your debt burden is smaller. Of course, short tenures means you pay a higher EMI; therefore, you should carefully consider how much you can afford to pay every month.

Higher EMIs

Higher EMIs will help you pay your loan off faster, as it means your loan tenure will be shorter. You should choose this option if you have a high monthly income. Higher EMIs will help you reduce the principal amount significantly, along with the interest; lower EMIs means you pay more towards the interest portion of your loan, and you will stay in debt for longer. Budget your monthly expenses, and future expenses like children’s education, medical expenses, emergency fund, etc., and then decide how much EMI you can pay month on month.

Pre-Payments

Whenever possible, make prepayments, which drastically bring down your principal amount. This will help you pay off your loan faster. Whenever you get some extra funds, use it for this purpose and be debt-free soon.

Balance Transfer

There are always lenders ready to offer better payment terms like lower interest or EMIs. talk to them and transfer your balance loan amount to them, and save on the interest you pay on your home loan.

Timely EMI Payments

Pay your EMIs on time. Set up an ECS mandate so that the amount is debited automatically, and keep your account funded so that it goes through. Not paying EMIs on the due date can result in fines and a reduction of your credit score. This will make it difficult for you to apply for loans later on.

Tax Benefits

Home loans entitle you to get some tax benefits. Consult a financial advisor to understand it properly, as these rules keep changing. You can use the money you save to make part payments and bring down your principal component.

Conclusion

Real estate market trends in Thrissur indicate that it is the right time to invest in property now. The market is showing an upward trend, thanks to the rapid developmental activities that are taking place in the city. When a city grows, demand for real estate also grows.

Choose a reputed builder like Varma Homes for premium 2 and 3 BHK apartments with the latest amenities, for a hassle-free experience. All Varma Homes projects adhere to the highest quality standards and RERA norms, and are well-designed and feature thoughtful layouts. You can easily get a home loan as Varma Homes is a trusted name, and also has tie-ups with major financial institutions.

FAQs

How can I pay off my home loan faster in Thrissur?

To pay off your home loan faster in Thrissur, consider several strategies such as making a higher initial payment, opting for a shorter loan tenure, increasing your EMI payments, and making prepayments whenever possible. Additionally, look for opportunities to transfer your loan balance to a lender offering lower interest rates. This combination of actions can significantly reduce your loan term and save you money on interest.

Is it better to choose a shorter tenure for a home loan?

Yes, opting for a shorter tenure can be beneficial if you aim to pay off your home loan faster. With a shorter tenure, you'll pay higher EMIs, but the total interest paid over the loan's duration will be significantly lower. This means you'll be debt-free sooner and save money in the long run. However, ensure that the higher EMIs fit comfortably within your budget to avoid financial strain.

What are the benefits of making prepayments on a home loan?

Making prepayments on your home loan helps reduce your principal amount, which in turn decreases the interest you have to pay over the loan term. This strategy can help you pay off your loan faster and save a considerable amount of money. It's a great option whenever you have extra funds, like a bonus or any unexpected income. Regular prepayments can lead to significant financial savings and a shorter loan tenure.