To own a home is one of the top priorities of millions. Two rooms, a kitchen, and bathrooms are attached to the two rooms: that is home for the majority. That said, homes come in various descriptions and budgets. They can be an apartment unit or a bungalow, and buying a house requires money which not everybody has in a lump sum. That is where the home loan comes into the picture, which millions have taken and are now repaying.
Clearing a home loan will take up a lot of time one spends lFor example, Assume you have taken a PNB housing loan with maximum repayment tenure of 30 years. Is it your intention to spend all of that time repaying the home loan? Of course not, to own a home is paramount, and there is lots more to life.
So, it all boils down to how fast can you repay the home loan? Let’s assume you opted for the maximum tenure and you’re paying the standard PNB housing loan interest rate. At the same time, you want to clear the home loan as early as can be. Can it be done?
Of course! It’s certainly an idea worth working on. To get started, here are five smart ways to repay a home loan before the end of the tenure:
Take a home loan which permits part payment
Loans including home loans are given based on the income and creditworthiness of the borrower. Like the popular PNB housing loan. Over time, as the years roll by, the borrower’s income and creditworthiness increase. The loan tenure shortens. Repayment can be in a shorter period. The lesson here is that taking a home loan should be finalized only after confirming whether the particular bank agrees to allow part payments as and when possible.
Increase EMI with salary hikes
So, salary appraisals are a regular annual feature in your workplace. It is also sure you will get a salary hike every year. It is a fact that your salary will grow over some time. The natural thing to do then is to increase the home loan EMI, cut short the home loan tenure, and along with that, the PNB housing loan interest rate, too. Restructuring EMI as per changes in salary isn’t a problem. The bonus is that this boosts the borrower’s creditworthiness.
Invest with repayment in mind
Even before you apply for the home loan, there should be funds with you to pay the down payment. Also, take a look at the investments you have made. They should align with your home loan repayment schedule and your EMI capacity. Learn about the bank’s prepayment features. Your investments should support specific goals. Top of the list should be the one to finish the PNB housing loan ASAP.
Mutual funds to the rescue
If the tenure is 30 years, there is time to invest wisely and accumulate the required money to repay the home loan, shortening the 30-year-tenure. Of course, there will be a risk, but mutual fund investments do help. They also help tax-wise! Mutual funds can be used to repay the home loan.
The role of bonuses
More than one source of income is a big plus. It could be rental income from premises in another location. It could be the handsome bonus the employer pays every once a year. All such extra income can go into repaying the home loan and the PNB housing loan interest rate, bringing down the total amount of the home loan and the interest paid on it, both over some time. Any extra income helps.
To build a home with a home loan is like planning a dream! But unlike a dream, this pursuit of happiness requires pre-planning and research about the kind of house, size, plot size, architect, materials, etc. Ideally, all these should be clear in the mind, and on paper, on an excel sheet, before applying for the PNB housing loan. Don’t forget it’s for your dream home to be made with your salt and sweat. The smartest thing to do with a home loan is to repay it in the quickest period possible. Remember your own home comes ‘first’, but there are a lot of ‘seconds’ you cannot afford to miss.