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Home loans: managing repayment, rate of interest and emis

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Home loans: managing repayment, rate of interest and emis

Last updated: March 31 2020
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  • Home loans: managing repayment, rate of interest and emis

    In what ways can home loan borrowers effectively manage their home loan repayments, cosidering the rate of interest and the emis that they pay?
  • #2

    #2

    Re : Home loans: managing repayment, rate of interest and emis

    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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    • #3

      #3

      Re : Home loans: managing repayment, rate of interest and emis

      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.
      Last edited March 17 2020, 11:23 AM.

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      • #4

        #4

        Re : Home loans: managing repayment, rate of interest and emis

        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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        • #5

          #5

          Re : Home loans: managing repayment, rate of interest and emis

          How much EMI do banks consider while providing loans to applicants and how much EMI should a home loan borrower pay every month?
          Last edited March 19 2020, 11:23 AM.

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          • #6

            #6

            Re : Home loans: managing repayment, rate of interest and emis

            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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            • #7

              #7

              Re : Home loans: managing repayment, rate of interest and emis

              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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              • #8

                #8

                Re : Home loans: managing repayment, rate of interest and emis

                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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                • #9

                  #9

                  Re : Home loans: managing repayment, rate of interest and emis

                  Prepaying a home loan is a very beneficial decision for home buyers as it helps ease the burden of emis.
                  Last edited March 31 2020, 08:58 AM.
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                  • #10

                    #10

                    Re : Home loans: managing repayment, rate of interest and emis

                    Originally posted by Malvish View Post
                    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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