Felling a financial beast, Repay your mortgage early:
Owning home is a feeling unto itself, but giving up a fat chunk of your income for the EMI payment is fairly nerve wracking. Add to that the long duration of the payment and the interest one has to pay, the entire process can feel very exasperating and worrisome. The trick to lighten your debt burden and save money in the coming future is a prepayment of your mortgage. Some still feel that paying off a home loan is a nearly impossible feat, so here are some steps you can take to ease your worries on the subject:
- Consider your entire financial plan:
It’s easy to be overwhelmed by the idea f a mortgage over your head and feel the need to have it paid off at the earliest. The best thing you could do is to review your financial plans and take stock of how much income you are receiving from your investments. When these returns are taking care of your short, medium and long term financial goal, you can direct the excess income towards paying off your EMI.
- Adjust your EMI payments:
Increasing the amount you pay every month even by just Rs. 1,000 or 2,000 can go a long way in paying back your principle amount. A reduction of your principle would reduce the amount of interest you’d need to pay and even cut your tenure by 1-2 years.
- Make small, partial payments:
Most banks allow their customers to make a certain number of partial payments in a year. So, when you find some extra income coming in, such as a festival or performance bonus, use it to make a partial payment on your loan instead of spending it on a new television. By making a few compromises in the present, you’d save a lot of money in the future.
- Set priorities and manage your funds.
Prioritise the areas in which you must spend money and where you can cut expenditure. Sacrificing and making compromises will become the norm for the first few years of your tenure, you may have to give up the annual trip abroad, but the satisfaction and security of having a roof over your head should be your motivation to pay off your loan at the quickest.
- Don’t bear it all yourself:
While you may be the only breadwinner in the family, this does not mean they cannot help in these situations. By spending smartly and economically, they will be able to drastically increase the amount of funds you have left over to pay the loan, making the entire process much smoother and less taxing on the mind.
Repaying a loan, at first, feels like trying to cut a tree with a butter knife. But with the right steps and measures, one can repay their loan well within the stipulated time or even a few years before.