Tips For ClearingHousing loans Quickly

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Index

• Housing loan closure - Benefits• How to repay Housing Loan faster?• SBI MaxGain Home Loan

Housing Loan Closure - Benefits

You will be owning the house by clearing off all the debts which will provide you stability.

Debt free financial position 

Paying off your loan faster is another way to save money because the longer one takes to pay off his loan amount, the more interest he has to pay along the tenure and the higher is the overall cost of the loan.

You will be increasing your equity in your home.

How to repay Housing Loan faster?• Partial Pre-Payment:

– An extra repayment at any time would help to reduce both the tenure and cost of a loan. So if one get a bonus or additional income, utilize it to make higher payments.

– In case of pre-payment, generally you pay off the principal amount, so your tenor gets reduced and you end up paying less interest. Interest keeps on increasing if your tenor increases. But if you pay off the principal amount then it will reduce your interest too.

• Apply for a Home Loan with shorter term. – This will Increase the EMI paid every month but it will reduce the

Interest that is paid to the home loan provider– Example:

– With Increase in 7868.56 EMI, you will be saving about 4,81,186.20 Interest

• Choose a better scheme:– Some banks offer a home loan schemes, at slightly higher of

interest of 0.25-0.5% or same rate as normal home loan.

– In these schemes, you can deposit money in the special account created by the bank. On the money deposited, you will get interest credit.

– Example:SBI offers Loan under SBI MaxGain scheme.

• Pay loan fees and charges up front:– Pay establishment fees, legal fees or etc upfront rather than adding them

into your loan.

• Increase the EMI when your Income increases:– When there is an Increase in income make sure to increase your EMI. – This reduces the tenure of the Home Loan

• Switch to a lender with a lower rate

– SBI MaxGain House loan is nothing but the OD sanctioned to you. In this case, the collateral is your home loan. So whenever you have a surplus amount then you deposit to this MaxGain account.

– Suppose you want Rs. 40,00,000 loan. In the ordinary situation, the interest will be charged on 40,00,000. Now, if you have chosen the scheme and have deposited Rs. 10,00,000 in a special account created by the bank, then interest will be charged on 40,00,000-10,00,000 = 30,00,000 only.

– Thus you will pay the loan faster. Also Rs. 10,00,000 in the account can be increased and reduced whenever you want.

SBI MaxGain House Loan

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