Here’s how you can plan your home loan monthly instalments

A home loan is a fabulous modern day financial tool that has helped many of us fulfil the dream of having a dream home. Although a home loan offers the required amount to purchase or fund a property, what matters after availing the loan is – the repayment!
That’s where a Home Loan EMI calculator helps you know an exact EMI amount that you will pay. Once you are aware of an exact EMI figure to pay, you can easily manage the repayment part.
Yes, if you know and if you have planned the home loan monthly instalments prudently, then there will be no issues in managing your monthly financial outflow.
However, if you have not, you will need to consider some factors as you strategize to repay a housing loan EMI such as:

  • Your Earnings

When you have got a consistent and stable income, you can easily opt to repay a higher EMI option. How? It’s because you and your creditor can assume that your income will increase with time. However, ensure that your home loan EMIs does not affect monthly household costs and investments. Lenders consider about 40-50% of your income when determining your EMI payments, an EMI figure letting you save at least 15% of monthly income is deemed perfect.

  • Your Expenditures

A Home Loan borrower should keep it safe when determining on the housing loan EMI to keep paying on-time, every time. Consider your existing and future expenses such as family costs, personal, lifestyle kids’, probable medical expenses and more. A borrower should also ensure that his/her concentrated EMI spending is unchanged by inflation over the years.

  • Your Age

Always know that your age also affects your home loan interest rates. When you are old, the risk of repayment increases as you get lesser time (in years) to do it. When you are young, and the risk factor is low as you can manage heavy EMIs over the years. It is also because you have got more years to do that. The more later you start your loan, you more you need to balance it with other growing spending as well.

  • The Rate of Interest or ROI

Also, the rate of interest or ROI of your home loan will not remain the same throughout the loan tenor. As a result, if you are unsure of the market conditions and can’t afford a floating interest rate, opt for a fixed rate so that you can pay a fixed EMI. You can know an exact EMI amount even before availing a home loan by using a home loan EMI calculator.

  • Other Considerations

Other than the discussed home loan repayment factors, you should also consider some other factors which many of you may be ignoring. Thus, you should consider how much income you will earn in the next 1 year, your lifestyle and living standard, decrease in income, if any, and, health conditions that may restrict your employment. Also, how you decide to fulfil your financial goals, future plans and retirement goals should also be considered before planning your home loan EMIs.
The Bottom Line
Always know that if you have the required eligibility, you can always grab a home loan from leading lenders.
However, a home loan runs into years, and if you are not prepared to carry on with the same financial status as currently, things may fall apart.
Hence, to keep your home loan repayment and EMIs going smooth, you should consider the discussed points and never feel financially burdened. Happy home loan management!
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