By: Pramod Khaturia, Founder and CEO, Easiloan
Home loans play an essential role in fulfilling your dream of owning a home. However, being able to continue enjoying every moment in your home depends on the payment of EMIs on time. Many people face difficulty paying their EMIs in emergencies, such as job loss or medical issues. Failure to pay EMIs on time can mark you as a defaulter and affect your credit score. So, to guarantee that your happiness does not come to a halt, we have highlighted a few strategies for avoiding an EMI default and maintaining your credit worthiness.
Carefully plan your investment before availing a home loan
It is wise to consider all the details about your income and expenditure before applying for a home loan. This will give you an idea of your monthly expenses and help you determine how much loan you can afford. You can then design a home budget and apply for a home loan based on this information. You might start investing your excess profits in a high-return option to make repayment easier. This will provide you with financial security in an emergency, allowing you to make your EMI payments on time.
Go for pre-payment of loan
A pre-payment is the payment of an EMI before the due date. Making frequent pre-payments can go a long way toward lowering the overall interest on your loan and allowing you to pay off the house loan faster. As a result, it is best to make a pre-payment whenever possible. You can use extra funds as they help to reduce your EMI burden.
Consider the option of loan refinancing
In the event that interest rates have gone up and you are unable to afford the increased EMI. It is preferable to speak with your bank about restructuring or refinancing your home loan. They can help you by extending the loan’s tenure, which will lower your monthly payment. Choosing to refinance will make you pay more money; it is better than losing possession of your dream home.
Choose a lender with affordable interest rates
Home loan interest rates may differ among lenders. So do your homework and evaluate all of your possibilities. Also, when looking for a house loan lender, look for one that has a low-interest rate. Understand the distinction between fixed and floating interest rates and choose the one that best fits your needs. You can take advantage of the online home loan EMI calculator to calculate your possible EMIs and compare your options until you get the one that meets your requirements.
Conclusion
You must carefully examine your finances before applying for a loan and during its repayment. Handling your home loan in a planned manner can save you from financial stress. Furthermore, the methods mentioned above will help you avoid defaulting or delaying your EMIs. Also, use the digital lending platform to compare and choose the right lender who provides pre-approved home loans with simple terms and a competitive interest rate.
