In what ways can home loan borrowers effectively manage their home loan repayments, cosidering the rate of interest and the emis that they pay?
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  • Many first time home buyers take home loans and hence it becomes really important to plan the repayment of the home loan and the EMIs to be able to repay without burining a hole in their pockets and being burdened by the long term of payment.
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  • @Malvish right! Many first time home buyers simply rush on to the first opportunity of a home loan without even considering the EMIs, rate of interest, tenure and other aspects. Some even don't know how the EMIs are calculated in the first place.
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  • @mmalhot yes that is true. A lot of people don't actually know how the EMIs are calculated and the interest component in them throughout the tenure. In a home loan repayment, each EMI includes a part of the principal borrowed and the interest with the interest component being higher than the principal amount during the initial repayment period than in later years. In the latter years the principal amount component becomes higher than the interest.
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  • How much EMI do banks consider while providing loans to applicants and how much EMI should a home loan borrower pay every month?
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  • Usually, banks allow an EMI of up to 60% to 70% of net monthly income taking into consideration all existing financial obligations of a home loan borrower.
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  • @Malvish I think most home loan borrowers try for the maximum loan amount just to keep spending the cash component to the lowest and they don't think about the EMIs much.
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  • @mmalhot Yes, some first time home loan borrowers go for the maximum loan available even if they have extra cash component with them. That should not be the approach and a home loan should be kept to the minimum bringing down the burden of EMIs.
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  • Prepaying a home loan is a very beneficial decision for home buyers as it helps ease the burden of emis.
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  • Originally Posted by Malvish
    @mmalhot Yes, some first time home loan borrowers go for the maximum loan available even if they have extra cash component with them. That should not be the approach and a home loan should be kept to the minimum bringing down the burden of EMIs.


    Yes many do that. I know people who have taken maximum loan just to save on the cash compomnent and now they are burdened by increased emis.
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  • Prepaying a home loan gets a little difficult for salaried individuals running on a budget as most of them have little scope of arranging extra or sparable cash in the later years once the home loan is taken and emis start running.
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  • Originally Posted by Malvish
    Prepaying a home loan is a very beneficial decision for home buyers as it helps ease the burden of emis.
    I haven't taken any loan till yet but need some information.

    If you have surplus of 1 Lac then how you do prepayment of it? how it will be different paying than EMI? Where you define it's Prepayment not EMI.

    Is there any charges on it?

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