Many people may have one or more loans to manage and repay. But that also means that a large part of your income will go towards your debts. It may also mean finding it tough to deal with monthly outlays.
Hence, if you have two home loans, personal loans or a mix of both and more, then you can deal with all smartly. The prepayment of home loan is one of the key factors here. Read on and know more!
- Repay loans carrying a higher rate of interest first
When you have multiple home loans or other loans, then you need to ensure paying the loan first that carries a higher rate of interest. You should attack the costlier loans like credit cards and home loans. If you have many home loans, then you should repay one with a steep interest rate. Once done, you can move on to the next loan. You can also go for the prepayment of home loans to reduce their costs and pay lower EMIs.
- Increase repayment amount with an increase in your income
Another way to deal with your debt smartly is by making way for extra payments with the rise in your income. If you are able to bump up the EMI with every increment in your Salary, then you will be able to pay off your housing finance and other loans a few months/years earlier. Whenever there is some extra money flowing in, the priority should be given to prepayment of home loans. If you wish to know an amount that you will be charged for making prepayments, then you can use the home loan prepayment calculator. If you have many loans running, then you should make the extra payments towards the ones that are costlier, as discussed earlier.
- Make the most of your windfall gains
Did you just receive a fat bonus or an incentive of the higher amount? If yes, then you can use the amount to repay your multiple home loans and other debts. In this case, you should not splurge on buying a mobile phone, television and more. Also, if you get some gains like maturity proceeds from bonds and mutual funds, then you can use all too. This will help you decrease the burden of costlier debts on your shoulders and manage your expenses easily.
- Consolidate your debt
If some of your debts have become just unbearable and they are consuming a bigger portion of your income, then it is better to settle them for once and all. To do that, you can go ahead and consolidate them. You can avail the facility of the debt consolidation loan to settle your high interest consuming loans. This way, you can decrease your debt to income ratio and pay only 1 EMI per month.
- Ask your lender to refinance or readjust the interest rates
Other than these tips, you can also ask your lender to refinance or readjust your current home loan and other debt rates. This way, you will be able to manage your expenditures better.
- Go for the facility of the home loan balance transfer
If your current home loan lender is charging you with way too higher rate of interest, then you can deal with that smartly. Yes, you can go for the home loan balance transfer facility. Under this, you can switch your current home loan from one lender to the one offering lower interest rates. To do that, your existing lender may charge some amount based on the outstanding amount left. You should check that in advance to determine the overall costs of making the switch. Many lenders may also permit you to avail the top up loan with the home loan balance transfer. It can help you using the money for purposes as per your needs.
What are you still waiting for? Go ahead and start implementing one of these tips and help yourself deal with multiple home loans and other debts prudently.