Home loan installments are required to be paid on time by the borrower to avoid getting penalized or getting the credit score reduced. Having proper financial planning is necessary while availing the home loans. Better financial planning leads to proper repayment of loans and thus can help an individual become debt-free on time and get the CIBIL score improved. The amount required for repaying home loans EMI should be kept aside from the monthly salary to pay it on time. Also if required the borrower should reduce miscellaneous expenses in case of the funds are found to be insufficient to repay the installments. The funds gained extra like incentives, the bonus should be invested in financial instruments to gain higher wealth which later can be used for the repayment of the installments. The borrower can even pay higher installments in case of increment received from the job and thus can plan to become early debt-free and save money on interest repayment as most of the banks provide a rebate on the early repayment of higher installments. The borrower should mark in the digital calendar or the printed ones the reminder to pay the installments on time to not miss the deadline or also can sign on ECS mandate for the auto-debit of the loans.
The borrower can avail loans from any of the banks or an NBFC which provides attractive interest rates to the home loan borrowers and also the ones who charge lesser processing fees to the lenders. By availing of the loans at lower interest rates the borrower can reduce the liability of monthly installments. Also availing of joint loans if two persons are working from the same family is a better option. Taking joint loans helps reduce the liability on the single borrower. Also, dual tax benefits can be availed by the borrowers by availing loans on a joint name basis. Having a stable source of income is also very much necessary before availing of loans. The borrower before availing of loans should ensure that they should have a stable job and also a stable source of income in case of either job or business. The employment should be stable where the job losses should be almost nil or in the case of self-employed, the business should be running successfully so that there should be no obstacle in repayment of loans. Having sufficient savings in a bank account can also reduce the botheration of the borrower for the installment repayment.
Home loans will not bother you if you take care of the following things
- Ensure having sufficient savings in bank account:
Maintaining a sufficient bank balance in the bank account can help an individual to be tension from the repayment of the installments. Thus the maintenance of a good bank balance can help an individual pay installment even in case of the salary getting delayed in the job. Also, the borrower is considered financially stable in the case of the ones who maintain a good bank balance in the bank account.
- Avail joint loans:
It is always recommended that if two persons in the family are earning especially the husband and wife then in that case the joint loans should be availed. Joint loans can help reduce the burden on an individual borrower as the responsibility is jointly shared and also dual tax benefit on income tax can be gained. Also if one of the borrowers amongst the home loans is a woman then in that case loans can be availed at lower interest rates than usual. A rebate of 0.50% lower can be gained in case of the joint name of the women borrower.
- Ensure the stable source of income before availing of loans:
The borrower should ensure that the income should be stable and consistent while availing of loans. There should be hurdles being observed while repaying the loans which may hamper the credit score of an individual. The applicant should have confidence in their work that the income will go on consistently so that there would be no hurdles in the repayment of installments.
- Avail the right lender:
Availing the right lender can help an individual be tension-free while repaying loans. The borrower should be the one who does not charge any kind of hidden charges. And also the ones who charge interest rates at competitive rates. There could be a drastic difference between the borrowers who charge lower interest rates and those who charge extremely high-interest rates. Like for example, one borrower charges interest rates of 6.50% per annum while the other charging 18% per annum interest rates. Also, higher interest rates increase the cost of monthly installments drastically. Thus taking care of choosing the right lender is very important.
Thus care should be taken while choosing the right lender and also of the consistent income while availing loans. The home loan applicant should ensure that they are financially stable while availing loans from the lender. Having a stable source of income and also sufficient savings is very much necessary while availing of loans which the borrower should take care of.