Borrowing a home loan is definitely done for a good purpose – but the burden of a loan to discharge on your shoulders makes it a bit of a challenge to deal with.
Discharging your home loan need not be that difficult a process, though. Here are some ways in which you can pay off your home loan quickly:
* Start through partial prepayment of a loan. The key to doing this is to save a good amount of money in reasonable sums, and then to use it for prepayment of your loan. The amount you prepay can be increased slowly on a yearly basis. The amount you set aside can then be invested in a recurring fixed deposit for a year, and by the end of the year, be used to make a partial prepayment of the loan.
* Use your bonus, variable pay amounts and incentives to help fund your partial prepayment process. The amount of money received annually in the form of variable pay or as a bonus can be set aside and saved, and retained towards prepayment.
* Save money in a mutual fund, and invest that amount for a repayment of your loan. Using equity and a balanced mutual fund savings mix will help you keep a reserve of monetary resources to be able to pay back your loan. There can also be a managed way to invest in order to use the invested amount in repaying your loan.
* Keep your EMIs going alongside your prepayment – by retaining the EMI at the same rate, you will be able to reduce the tenure of your loan, and will help you repay the loan much earlier.
* Keep your EMIs going, and increase the amounts paid on a monthly basis when your income increases. When your income increases and you are able to pay a larger monthly instalment, your loan gets discharged much quicker than otherwise.
* Switch to a lower interest home loan. Try to avoid loans with a higher interest rate, as that makes it difficult to repay the amount borrowed. You can switch to a provider who charges a lower rate of interest, and suitably pay the amount without much of a hassle. This will also enable a low EMI to start with, so when used in conjunction with the earlier pointers, this will be of great advantage to you.
Home ownership should ideally be a happy prospect rather than one you fear and dread. The simplest way to do that is to make smart decisions concerning your home loan. There’s nothing like owning the home of your dreams and having a debt-free future.
