The most common way to buy a home is borrowing a Home Loan from Bank or any financial institution. Isn’t it?
But have you ever thought about the background story? Why banks love to offer you loan? There is a big agenda behind this love.
Let’s take an example. Suppose you want to buy a property of Rs 50 Lakhs.
Now your bank approves your Home Loan for 20 years with rate of interest of 9.5%. Your EMI is nearly Rs 46,606
Pretty good ! Isn’t it?
Now let’s do a small calculation..
The total amount you will repay to your bank in 20 years is approximately 1.11 Cr.
OMG !! It’s more than double of what you borrowed from bank!!
Now, have you realized why bank loves you so much 🙂
Following 3 strategies can help you to repay your home loan quickly
Strategy 1: Increase your EMI.
[blockquote author=”Strategy 1“]If you find you are able to pay more than what bank has asked as EMI then tell your bank to increase your EMI.
It will reduce your principal part constantly and you will finish your loan before the tenure you planned.[/blockquote]
Strategy 2: Fund whenever you have money.
[blockquote author=”Strategy 2“]Rethink about your yearly income. Think about the bonus, promotion, benefits or any extra irregular incomes. Again it will reduce your principal drastically. Immediately you will see the change in your monthly interest deduction.[/blockquote]
Strategy 3: It’s a loan killer combo strategy.
[blockquote author=”Strategy 3“] Increase your EMI every year based on your yearly income appreciation.
As well as whenever you get extra funds in hand, even at least few thousands, put it in your loan account.
It will eat up your principal so fast that you will finish your loan much before your planned tenure and with HUGE savings.[/blockquote]
Everything in life works on planning. If you plan properly you will definitely win. – #Som