News India Live, Digital Desk: Home Loan EMI: It is everyone’s dream to have your own home. This dream came true after many years of hard work, savings and planning. But in today’s inflation -filled era, most of us are taking home loans and realizing this dream. While purchasing the house, 80 to 90 percent people have to take loans and the remaining amount has to be paid with their savings. However, there may be a mistake in this visit to buy a house, which may later find you financially very expensive and has the biggest impact on the EMI of the loan.
Why do banks extend the loan period when the loan EMI increases?
When you start paying the loan EMI, it is a fixed amount in the beginning. But this EMI is mostly based on floating interest rate. This means that if the repo rate increases, the interest rate on your home loan also increases. However, banks keep your EMI equal and rather increase your loan duration, which is a major mistake made by many customers paying home loan EMI.
For example, if a home loan of Rs 30 lakhs taken at an 8% interest rate starts going to 11% after 5 years, instead of increasing EMI, banks increase your remaining 15 years of loan to 25–28 years. This means that as long as you realize this, it is too late, because you are paying double interest while paying the EMI of the loan and the principal amount is slowly decreasing.
If there is no plan for the loan EMI, the dream becomes a financial burden.
Actually, buying a house is a pleasure. But if the loan EMI is not managed properly, then that dream becomes a financial burden. Banks increase the loan period instead of deliberately raising EMI, as they benefit from getting interest for a long period. But this affects the pockets of consumers and their future plans are also affected.
What should you do if you want to increase the loan duration and increase the loan duration?
If you want to avoid paying the EMI of your home loan only by extending the duration, then every time the repo rate or interest rate increases, you should tell the bank clearly, “Increase my EMI, but don’t increase the period.” Yes, you may have to pay a little more every month, but this will reduce the burden of overall interest and you will be able to be debt free within a planned time limit.
Many customers forget this and trust the bank’s decision. The time it takes doubles to repay the loan by this mistake. Therefore, loan EMI management is not only financial discipline, but is also a guarantee of safety of your dreams.
Home loan EMI is a responsibility that fulfills your dream
A house is your life dream. The loan taken to realize this and its home loan EMI should not remain on you for a long time. With proper planning, timely restructuring and clear communication with the bank, you can be a premature loan free. Therefore, for your own financial freedom, look at the loan EMI seriously and take every decision at the right time while taking a loan.
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