Plan Your Housing Loan EMIs in Advance for Future

If you had a long-craved dream to buy or construct a home, then you don’t need to worry about liquidating assets to make way for funds. 

Yes, when the facility of the home loan is so easily available these days, you can go for it and fund your abode. 

But many home loan borrowers are unaware that the debt will continue to hamper your income and outlays for long. 

However, by considering a few aspects, you can plan your housing loan EMI and keep everything in your control. Read on and explore more! 

When you avail a home loan, then you should ensure that the EMI does not consume more than 40% of the total income. 

If it is more, then you may find it tough to manage repayments and income. 

To know an exact EMI amount over the tenure, you should use the home loan EMI calculator available on a lender’s site for free. 

Being aware of the exact loan EMI will help you make way for it confidently. 

Here’s why you need to buffer the home loan EMIs

• When you purchase a home, you may have some other outlays other than the home loan EMIs. The standard charges may be stamp duty, shifting costs, registration for the home, brokerage and maintenance costs. 

• You should plan to have the contingency funds ready that may help you pay the home loan EMIs for at least 3 months. 

• If the possession of your home gets delayed, then you will have the added burden of the rent, along with the home loan EMIs. The delay may last longer than the EMI holiday that your lender may give you. Thus, you ought to pay both rent and the home loan EMI. 

• What if you get laid off and don’t have the job to support your expenses and home loan EMIs? In this case, you will still need to make the home loan EMI repayments. In this case, the home loan EMI buffer that you will create for 3 months or more will support the payments till things improve. 

• When there are festivals in a year, the normal trend is overspending on many things that are not required in the home. But you can also use the extra amount that you would otherwise invest on these to cope up with any turbulent times. 

• If you meet with an unfortunate accident or are diagnosed with anything critical, then it may take a while to avail the insurance policy benefits. In this case, the home loan EMI buffer may be used to pay for it. 

What will happen if you don’t pay your home loan EMIs on time?

It becomes a must to make payments for your home loan EMIs. You may face consequences of many types when you don’t make timely home loan EMI payments. Take a look: 

• If you don’t have enough funds in your bank account, then you may miss paying the home loan EMI. In this case, the bank may give you some grace period. 

• Once the grace period ends, the lender may charge you with the penalty amount. 

• It may also mean that your credit score may get affected. And that would mean that you will have issues in getting the approval for the next loan. 

How to buffer the home loan EMI?

• You should not underestimate the power of saving small amounts. You should separate the needs out of your desire and save money each month for contingency. 

• You should aim for saving enough money so that a total of 3-months contingency is created. 

• You should use a combo of savings account and fixed deposits. You can use the ROI of your invested vehicles on interest payouts on a savings account to save for the home loan EMI. 

You are now aware of the reasons to advance your home loan EMI and how to do that. 

You should start following the same and be confident of EMI payments in the future.