The payment of home loan EMI is necessary after applying for the home loans. The home loans installments, if delayed to be paid, then, in that case, the bank may charge a heavy penalty. The full form of EMI has equated monthly installment or else the easy monthly installment. The home loan EMI can be calculated on an EMI calculator. The home loans can be opted from any of the banks or NBFC as per the borrower’s choice. On every portal of the bank or an NBFC EMI calculator is available. The EMI calculator helps to know the eligibility of the home loans to the borrower and the monthly installments being chargeable to the borrower. The borrower does not have to depend upon the bank official to know the eligibility of the loans according to the salary; instead, the borrower can check the eligibility by himself. The tenure of the loans can be extended up to 30 years to the borrower; however, the actual approval may be based upon the borrower’s age. In the case of the young age applicant, the borrower can choose the tenure of the loans by themselves.
In case of a better salary, it is always recommended that the borrower opts for a lower tenure of the loans as it reduces the repayment value of the loans. However, on the same interest rates, if the loans are taken for higher tenure, then the repayment amount increases. Also, the borrower can make faster repayment of the loans to get the rebate on the loans. As the repayment value of the loans is calculated on a cumulative basis, the repayment value is already high for the loans. Thus the borrower should try to save the maximum amount paid to the bank or an NBFC as repayment value. The borrower can also save tax on the repayment of the installments. The borrower can save up to Rs.1.5 lakhs on the principal amount and Rs.2 lakh on the interest amount. The tax benefit is being given to the borrowers to encourage them to take the loans and reduce the burden on the borrower. Thus in the long-term repayment of the loans, the borrower can save a huge amount of sum on income tax exemptions. The borrower can set the auto-debit facility for the EMI payment to avoid getting delayed from the installment payment.
Things to remember while paying home loan EMI:
- Pay the EMI on time:
The borrower should repay the installments on time. The borrower should remember the due date and accordingly should remember to pay the installments within the due date to avoid penalty being charged and to avoid CIBIL score getting affected.
- Set a reminder for the due date of EMI:
The borrower should set a due date for the EMI payment on the cell phone to avoid getting delayed in the installment payments. Alternatively, the borrower can also set the auto-debit through ECS mandate, i.e., electronic clearance system. Setting auto-debit can lead to automatic payment of the loans at a particular date so that the borrower never misses the deadline for EMI payment.
- Do not forget to insert the payment receipts while filling income tax:
The borrower should attach the receipts for the income tax exemptions to avail deduction on the income tax during the repayment of the loans. Section 80C and section 24 are applicable for the exemption under the repayment of loans.
- Try to save maximum money during payment of the installments:
The borrower should increase the savings and invest in financial instruments like mutual funds or stocks for better returns. During the payment of EMI’s, the borrower must save maximum so that if there are any financial problems being faced by the borrower like emergency medical expenses or else delay in getting the salaries, then, in that case, the borrower still should be able to repay the installments on time.
- Try pre-payment of the loans:
The borrower should try to pre-pay the loans as far as possible to help the borrower become early debt-free and avail rebate on the income tax. Thus pre-payment can help save money for the borrower, so thus it is better to pre-pay the loans as early as possible.
The borrower should take care of the above things while repaying the loan’s installments. Thus early repayment of loans is beneficial to the borrower to save money on repayment. Also, the borrower should keep aside the payments received through bonuses or incentives to repay the loans. The borrower can also save on income tax during the payment of the EMI’s.