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7 Tips to Manage Home Loan EMIs More important than opting for a housing loan is managing the equated monthly installment and repay on time

By Rahul Grover

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Availing a housing loan is quite common in India, considering the high demand within the real estate sector in this day and age for luxury or affordable luxury, and with property prices accordingly increasing. When there is a down-payment ready and eligibility criteria is met, getting the loan is far from a challenge.

However, more important than opting for a housing loan is managing the equated monthly instalment (EMI) and repay on time. Skipping an EMI is a risky affair as it can lead to penalties as well as have a negative impact on your credit score.

Getting a home loan is a long-term commitment and part of a huge financial decision for you. Here are advices to efficiently manage your EMIs.

Scour Cheaper Interest Rates

This is the first and foremost recommended step, of conducting extensive research before opting for a home loan. It is advisable to compare interest rates, and zero in on which bank offers the cheapest one on your loan, so that the EMI is not an issue on the due date.

Prioritise and Schedule

Another important tip is to make your repayment a top priority, as paying your EMIs within the stipulated timeframe enhances your credibility with that particular bank. A wise thing to do is to schedule the payment close to your due date in order to avoid a default due to insufficient funds in your account. As mentioned earlier, never skip an EMI as it can make you lose face with your bank, wherein a long-term default can also cause your home to become a bank attached property.

Try Keeping a High Amount

While this might seem like a challenge, it is always recommended to maintain a higher EMI amount, so as to clear your total dues before the home loan tenure ends, generate ample funds and improve equity to be able to increase the EMI amount. Evaluate your budget, finances and affordability options before deciding on your EMI amount.

Opt for Lump Sums

Experts always suggest using maturity proceeds or bonuses for pre-paying parts of the home loan between intervals, like lump sum payments. These contribute to a large extent in reducing the loan tenure considerably, especially if paid during the early years of the loan when the principal outstanding is high.

Use EMI Calculators

A number of banks that offer home loans also have an important feature, their EMI calculator that helps with getting an estimate of the home loan instalments you can pay every month, basis your income, expenses and several other factors. Moreover, it provides accurate insights into EMI payments, interest rate as well as cash downpayment for the loan. All of this makes it easier to choose the suitable home loan scheme, and thus, it is advisable to use this effective tool.

Switch Lenders if Need be

It is possible that a situation will arise wherein you find that the expense for servicing the home loan is too high. At this point, it is recommended that you look for a lender that offers a lower rate and make the switch, as different lenders lower their rates at various intervals. The switch is usually seamless, and includes a loan appraisal process, redoing your paperwork and some nominal charge.

Pay an Extra Annual EMI

This may come across as difficult in the initial phase, but pays off in the long haul. Try to pay an extra EMI every year, as there is no prepayment charge for floating rate term loans involved. Through this, you can reduce your principal outstanding amount at large.

If you diligently follow these simple suggestions, it will be a cakewalk to effectively manage your home loan EMIs. It ultimately boils down to handling your money mindfully and wisely. As long as you follow suit, you will never have to worry about missing any EMI payment or struggle with it.

Rahul Grover


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