Managing a home loan sounds scary enough, but managing a 30 lakh home loan is even scarier. By using the right strategies and creating useful steps, you can make this process easier.
Table of Contents
Choose the Right Loan Tenure
Your loan term is one of the factors that decide how much EMI you’ll be paying every month. A longer tenure results in a lower 30 Lakh home loan EMI, but it means you’ll have to pay a lot more interest overall. A shorter tenure gets you a higher EMI, but it means you’ll pay off your loan faster with less interest paid overall.
Make Prepayments
Making prepayments is one of the most effective ways to reduce the total interest you might pay. Even small but consistent prepayments can help you bring down the total interest you will have to pay.
- Partially prepay your loan whenever you have extra funds, such as bonuses or tax refunds.
- You can ask your lender to increase your EMI, and by doing so, you are paying off your loan quicker.
- You can make an annual lump sum payment, because an extra EMI payment can go a long way in lowering your total interest.
Negotiate Your Interest Rate
You have the right to negotiate with your lender, especially if you have an exceptional financial profile. So, before applying for a home loan, you can compare different interest rates from different lenders. Even the smallest of reductions can help you save massively.
Understand Your Loan Structure
There are two types of interest rates you will get, floating and fixed. With floating rates, the rates depend on the market, which can be good if the rates decrease but very risky if it increases. A fixed rate remains constant for the entire loan duration. So, evaluate the market situation and compare various rates to understand which one is ideal for you.
Make the most of Tax Benefits
You can avail a deduction of a maximum of ₹1.5 lakhs from your basic amount under Section 80C of the Income Tax Act, and under Section 24B, you can avail a maximum deduction of ₹2 lakhs on interest paid for a home loan of self-acquired property. However, if it’s a let-out property, there is no such limit on the deduction available to you. These acts help reduce your taxable income, which can then help make repayment much easier.
Balance Your Debt-to-Income Ratio
You can check your home loan eligibility to know how much you qualify for based on your income and DTI ratio.. Vendors look at this before approving a loan. Your EMI should not be above 40%-50% of your monthly income. If your DTI is fine then it makes it easier for you not just to get a loan, but also to repay it, as the lenders may give a lower interest rate if you have a low-risk of default.
Debt Consolidation
If you have a lot of debt, like credit cards or loans, you should consider combining them. When you go for this option, you can save more on the total overall interest. Also, rather than dealing with a series of payments, you simply have to concern yourself with one instalment, making repayment simpler and hassle-free.
Whether you are dealing with a ₹30 lakh home loan EMI or ₹50 lakhs, the secret is strategic borrowing and planning. Utilize online tools such as an EMI or eligibility calculator to ensure repayment is comfortable for you and you avail of the most affordable option.
