Home Loan

This is How You Can Manage Your Home Loan in Few Simple Steps


A home loan comes with certain risks. The tenure for housing loans can go up to 30 years, and the loan amount is usually in lakhs or crores. As a result, you will be paying EMIs for a large part of your career. Hence, you should learn how to manage your home loan better. Read on to learn how to effectively manage your home loan.

Why do You Need to Manage Housing Loans?

You might be concerned about how to manage your home loan EMIs. Sadly, it is not as simple as other loans. Housing loans are high-value loans with a long tenure. Aside from a home loan, you will also have to pay for other expenses. Some of these include home expenses, travel costs, and various other expenses. If you have your spouse as a loan co-applicant, it becomes even more crucial to be on top of your costs.

You may have taken out a home loan for an amount that can stretch your finances. But why let the joy of being a homeowner be affected by such matters? Let us look at how you can manage your home loan expenses better.

How to Manage Your Home Loan?

Managing housing loans is a major task. Hence, you should know how to manage your home loan. This helps you have better control over your financial future. Here are a few steps that you can follow:

  • Opt for a low amount: You do not need to take a higher loan just because you are eligible. Borrow only what is needed for the purchase. With a high loan value, you need to make a higher down payment. However, if you can afford that, you will benefit from low EMIs. You will also be able to repay the loan more quickly. 
  • Go for a higher EMI: If you have to take up a high home loan amount for some reason, then it will be ideal if you go for a higher EMI. You must adjust your finances based on future growth and then opt for a high EMI that you can afford. But make sure you also need to take care of other costs, so think wisely before you decide. When you go for a higher EMI, you can repay the loan early and ensure the interest cost is also less. 
  • Pay EMIs on time: You need to pay your EMIs on time. Otherwise, the lender will levy late fees or penalties. It will be ideal if you opt for the auto-debit option so that there is no oversight on your part. Ensure your account has a sufficient balance around three days before the EMI payment due date. Any delay in paying the EMIs or bounced EMIs can affect your credit score
  • Pay one extra EMI: People want to repay their loans as soon as possible. If you want the same for your home loan, make it a point to pay an extra EMI every year. This would not hurt your finances but help you repay the loan before maturity. Also, your interest costs will be reduced when you repay the loan earlier than the due date. 
  • Start a mutual fund: Mutual funds are ideal for meeting crucial life goals, and buying a home is one of them. You can start a mutual fund investment to help you pay your home loan EMIs on time. This will help you create a sizeable corpus over time that will help you repay the loan amount. 
  • Align your portfolio: If you have a home loan EMI to pay, you should align your investment portfolio to meet your commitment. This implies liquidating investments that do not offer a return higher than the home loan interest rate. It will help you lower the loan amount, reduce your EMIs, and save on interest costs. On the other hand, if the investment is giving you a higher return than the home loan interest rate, you may continue with it. 
  • Reduce costs and increase income: When you have a home loan EMI, make sure to reduce other costs. At the same time, find ways to boost your income. In the present, when working from home has become the norm, you can take on some freelance projects. Your spouse may also take up such tasks to boost the family’s income. It will help you repay your housing loans faster. 
  • Use windfalls: If you receive any windfall income, do not spend it on leisurely activities. Try and use your funds to make home loan payments. It ensures that the loan is paid off on time, lowering your interest payments. 

Wrapping Up

Housing loans are not easy to manage. With the right financial planning, however, you can handle them wisely. Try to choose a lender that offers a low home loan interest rate.

To learn more about how you can reduce your home loan EMIs, go to the Piramal Finance website. Here, you can read more such finance-related blogs and articles. It will help you understand the different types of home loan options, affordable home loan interest rate options, and ways to manage your housing loans.