A condition set that provides a short tenure range and a low rate of interest can provide a faster way of clearing dues for a home loan. A shorter tenure period generates a low rate of interest on the loaned amount. If fused with a nominal rate of interest it will substantially modify the specified terms on the EMI making them more convenient as well as affordable. While a desirable loan term helps in clearing out loan dues quickly you can also achieve the same by conducting prepayments. You can start by assigning a specified amount from the overall income as soon as your increment or business growth starts kicking off. The rough idea of prepayment is that the borrower will be charged 2 to 4 per cent on the principal. While it may be the case, prepayment can be ruled out if a home loan has already been availed. If there is already a floating rate of interest on the home loan there is no need for a prepayment. A home loan prepayment calculator helps to generate the exact figure on the prepayments under a loaned amount. As soon as you can get the rough figure on the home loan prepayment calculator you can start plotting for strategies that provide efficient ways of making prepayments. As a loan borrower, it is a top priority to reduce the liabilities on your loaned principal. By putting aside your extra income as incentives, you are taking steps to reduce the expense on the interest. You can choose to invest in fixed deposits or mutual funds for making prepayments or save every month to generate the required prepayment sum.
Reference Read: How to Make Housing Loan Prepayments Effortless
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |