Ways To Pay Off Your Home Loan Faster in Trivandrum

Posted onSep 04, 2024

The real estate market trends in Trivandrum indicate that it’s the ideal time to purchase a home, whether it’s for your own use or as an investment. The reason being that the city is experiencing tremendous growth and the demand for real estate is increasing steadily, pushing up prices. Today, home loans are easily available, allowing people to purchase property when they want. But it’s a debt that you need to pay off; the sooner, the better. 

Here are some tips to do that:

Opt for a Lower Amount

The benefits of opting for a home loan in Trivandrum, is that you don’t have to wait, and you can buy a better, more expensive property. By paying a high down payment, you can choose to avail of a lower loan amount, depending on what you can afford. Check your disposable funds and calculate your expenses, and you will know how much loan you need. If you can pay about 20% of the value of the house, or even higher, your loan amount, and consequently the interest, will be relatively lower.

Shorter Tenure

The shorter the tenure you choose, the faster you will pay back the loan, and this is one of the most critical things to know before getting a home loan. Remember that shorter tenures mean higher monthly payments, so you need to know the state of your finances, and know what amount you can comfortably pay each month before you choose the loan tenure.

Higher EMIs

When you elect to pay a higher amount each month, it means reducing your loan tenure. This way, you will be able to pay off your loan quicker. Higher EMIs also mean that you pay lesser interest, as the major portion of your EMI will go towards paying off the principal amount. You should decide on the EMI after having a clear picture of your monthly expenses, and keeping aside something for emergencies.

Partial Payments

If you come into some extra funds any time during your loan tenure, use them to make part payments towards the loan. This can help to reduce the principal amount substantially, helping you pay off your loan faster.

Balance Transfer

After a few months, you may find a lender who is willing to offer softer terms of payment like lower interest, EMIs, or others. Negotiate with them and transfer the rest of your loan account to them to save on interest to be paid.

Pay on Time

Make sure you’re never late with an EMI payment. Ideally, you should set up an ECS mandate so that the amount is automatically paid from your account. Delaying or missing EMIs have severe consequences, like legal action, fines, reduction in credit score, and difficulty in obtaining loans in the future.

Tax Benefits

If you have a home loan, you get tax benefits. If you’re unsure how it works, contact a chartered accountant or other financial consultant to understand it better. The rules tend to change frequently, so update yourself. The money saved in this way can be used to make part payments.

Conclusion

Availing home loans is easy; it’s paying it back that is the difficult part. The longer your tenure, the longer you have to keep ensuring that your account is funded to pay your EMIs. You will continue to be under pressure as long as you have the loan on your head. If you’re looking for reputable project developers who can connect you with the best lenders with great service, Varma Homes is your answer. Varma Homes is one of the best builders in Kerala with an excellent track record of superior quality, timely delivery, and transparent transactions. All projects conform to RERA and other government norms, and feature world-class amenities.

FAQs

What are the benefits of opting for a shorter loan tenure?

Opting for a shorter loan tenure means you'll pay off your home loan faster, which can save you a significant amount on interest over the life of the loan. However, it also requires higher monthly payments, so it's important to assess your financial situation and ensure that you can comfortably manage the increased EMIs.

How can making partial payments help me pay off my home loan faster?

Making partial payments whenever you have extra funds can greatly reduce your home loan's principal amount. By lowering the principal, you decrease the interest charged on your loan, which helps you pay it off quicker. This strategy is particularly effective if you come into unexpected money, like a bonus or inheritance.

What should I do if I find a lender with better loan terms during my tenure?

If you find a lender offering better loan terms, such as lower interest rates or more favorable EMIs, you can consider a balance transfer. Transferring your loan to a new lender with softer terms can save you money on interest and help you pay off your home loan faster. However, be sure to calculate any transfer fees and ensure the savings outweigh these costs.