Use These Tips to Expertly Manage Your Home Loan

By: Alex James

Besides being satisfactory, home loans may also feel like a burden sometimes. A well-structured plan and mindful financial decisions will ease the burden. Additionally, consider the mentioned few points to get assistance in home loan management. 

  • Know Your Expenditures

Knowing your finances is crucial if you plan to apply for home loan. Knowing the liabilities will let you know the current amount of cash. It will enlighten the users about how much their budget allows for EMI, considering other EMIs (if any). Setting a low EMI amount will be beneficial on a low budget, while a high EMI will set off the loan sooner. Several home loan EMI calculators, based on different home loan interest rates and times, are available online to ease decision-making.

  • Ensure Prepayments

EMIs are calculated based on the current income. But we see income growth, receiving bonuses and other similar cash benefits from time to time. Investing them as prepayment of loans will significantly help in the long term. It reduces the cost of home loan interest rates and outflow. Considering the mentioned opportunities, check when you apply for a home loan if the lenders request minimal charges for the prepayments, as several banks do not. Prepayments are generally allowed after one year of taking the loan amount. 

  • Avoid Missing EMIs

Missing EMIs generally occur due to irresponsible behaviour or if serving multiple EMIs. The consequences can be highly negative, with the bank’s downfall of the CIBIL score and penalty charges incurring financial losses. To avoid these situations, it is best to set reminders or initiate auto-payment of EMIs. Ensure the proper bank balance is maintained before the debit to avoid inconvenience. A low bank balance or EMI bounce will result in further loss of money through incidental charges. 

  • Financial Management

There are several aspects to be considered while managing your finances. Choose the applicable home loan interest rate based on your income. Utilise the extra cash income of any form in prepayments. Additionally, it is important to avoid unnecessary expenditures. Rather save them for prepayments to reduce the interest cost. 

Taking multiple loans will create problems in EMI management. The EMI bounce will incur incidental charges, and late or no EMI payment will affect the credit score. In case of urgency, avail of the home loan top-up. Moreover, analyse the investments. Invest only if the returns are significant enough to pay the EMIs. 

Similarly, claim tax deductions only if ROI or return on investment is higher than the home loan interest rate. Otherwise, liquidate the investment and utilise or accumulate the amount for prepayment purposes. Consider these points when you apply for home loan to avoid stress. 

  • Low-Interest Rates

The lack of knowledge of available interest rates or low credit scores may result in customers to apply for home loan with high-interest rates. On the positive side, it is certainly possible that they come across lower-interest rates than the current ones. Utilise the opportunity through a home loan balance transfer. 

Consider the mentioned possibility when choosing to apply for a home loan. A timely EMI payment for a year will only make the customers eligible for a home loan balance transfer. Moreover, take the balance transfer seriously. Strictly analyse the remaining duration of the loan, additional charges on balance transfer, the difference in the interest rate, and the overall effect on your budget and total finances. 


The decision to apply for home loan is difficult and requires thorough analysis to avoid financial losses and mental stress. Considering the mentioned points, home loan interest rate, and efficient analysis based on the current future income possibilities, make correct and logical decisions. 

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