This document provides several strategies for managing home loan payments more effectively: 1) Making partial pre-payments above the minimum amount owed can help reduce the principal balance faster and thus shorten the overall loan term. 2) Switching to a lower interest rate, such as when market rates decline, can save years on repayment by lowering monthly costs. 3) Increasing the equal monthly installment amount by allocating additional funds each month from sources like bonuses or savings can significantly speed up the loan payoff process.

1. Smart ways to
manage home
loans

2. Index
• Introduction
• Partial Pre-Payment
• Switching to Lower rate
• Increasing the EMI
• Summary

3. Introduction
Many of us face the problem in
managing to pay interest for our
home loans.
Here are some really good
solutions to answer all your
queries.
Hey I have
been figuring
out how to
manage my
home loan ?
Why is
everyone
asking the
same
question ?

4. Partial Pre-Payment
• This is the easiest way to close a housing loan faster
• The effect is that the one-time payments help to reduce the principal
balance in the loan. And when the EMIs continue, they have lesser of
the principal to cover. So the same EMIs need a lesser time to close
the loan. More earlier and more frequently the partial pre-payments
happen the faster the loans close.
• Banks generally allow partial pre-payment starting from Rs.10,000/-.
There are no charges for partial pre-payment or even full prepayment
of housing loans currently.

5. Switching to Lower Rate
• The interest rates current are in a rising trend. There are times when the
interest rates start going down too like NOW! Based on the interest rate
reset period, different banks will reduce their rates at different times. If the
reset interest band of your lender is a wider band, you may be at a higher
interest rate for a long time after other banks have started to reduce their
rates.
• Switching to a lower interest rate will shave off a few years from your
housing loan. Care however has to be taken about not jumping too many
times or with low interest rate differences. A heartening detail though is
the removal of prepayment penalty. This can definitely boost the prospects
of a home loan switch easing the cost burden for the loan borrower
further!

6. Increasing the EMI
• This is another option to close the loan faster. If you can spare a
portion of an increment to increase the EMI, considerable saving
could be made. For example a Rs.30,00,000/- loan for 20 years will
need an EMI of Rs.28,950/-. If you can spare an additional Rs.2,300/-
per month, the loan can be closed in 15 years itself.
• The EMI can also be increased by making use of money that was
going into an endowment insurance plan or a recurring deposit in a
post office.
• Increasing the EMI can be done at any point during the tenure of the
loan. There are generally no charges for increasing the EMI.

7. Summary
Only after closing the home loan
does one really become the
owner of the house. Closing the
loan as soon as possible not only
relieves the mental strain of
carrying a debt but also releases
more money into the family
budget.
Hope I am able
to convey you
apt solutions ?
Thanks a
lot !