4 Foolproof Tips to Manage Home Loans Like a Professional

home loan

Although it’s correct that a home or housing loan enables you to fulfill your cherished dream of becoming a house owner, it increases your financial liabilities significantl

It is worth noting that home loans are collateral-based, meaning the lender possesses liquidation rights to the property until the loan dues (principal+interest) are repaid in full. If you stop repaying EMI, the lender may liquidate the property and report it to several credit rating agencies. 

Credit rating agencies keep track of the borrowers’ payment records and decrease the credit score whenever a borrower defaults. And a low credit score makes it considerably difficult to apply for credit cards or loans. 

So, making informed decisions is paramount when availing of a loan. Read on to discover four foolproof tips to help you manage loans like a professional. 

4 Foolproof Tips to Manage Home Loans Like a Professional

 Budgeting Comes First

Money management plays a crucial role in a sensible borrower’s life. They control their urge to spend on unnecessary items and increase their financial awareness to tackle the liability of a home loan

Here are the tips to consider when managing money for handling home loan EMI:

  • Frame an Efficient Budget – You must jot down your fixed expenses in a notebook before availing of a loan; write your income and see the amount you are left with after paying your fixed expenses and allot a fixed amount every month to pay the EMI
  • Invest – You may invest in a fixed deposit or mutual fund SIP to grow your capital before the EMI starts or deposit a lump sum and withdraw a fixed amount from your investment every month
  • Hunt for Discounts and Offers – Indian lenders often run special campaigns to attract customers. You may call the lender’s loan customer care number to inquire about such offers 

Pay More 

Increasing your loan EMI is one of the best decisions to make as a borrower. When you ask your lender to increase the EMI, they lower the tenure and may also reduce the interest rate. 

And since home loan principal is usually quite high, even a 0.5% difference in the loan interest rate can allow you to save a reasonable sum every month.

It is wise to call the lender’s loan customer care number to inquire about the savings before choosing the EMI amount. Alternatively, you may use an EMI calculator to spot the difference yourself.   

Pay Early To Become Debt-Free Quickly

loan part payments or prepayments do not carry any penalty if your loan interest rate is floating. According to the rules laid by the Reserve Bank of India, Indian lenders cannot charge any prepayment or part-payment penalty on floating-rate loans. So, you can prepay as many times as you want to reduce your liability and become debt-free quickly.  

If you receive a bonus from your company or the maturity proceedings from a fixed deposit, use it to prepay the loan EMI. Doing so enables you to reduce the loan term and become eligible to apply for a new loan or credit card.

Read More: What You Should Know Before Applying for a Home Loan

Transferring Home Loan Balance 

A loan balance transfer is an excellent way to reduce your loan liability without burning the midnight oil. In balance transfer, borrowers transfer loans from one lender to another who offers better terms, more affordable interest rates, or flexible tenure.  

However, before opting for the balance transfer facility, calculate the cost. You may have to pay the penalty for closing the loan with one lender and the processing fee to the new lender for transferring your loan. If the actual saving is paltry, it is better not to change the lender. 


The four tips mentioned in this article can enhance your peace of mind as you repay the loan principal and interest. Ensure to call the lender’s customer care number to learn about the loan terms and carefully go through each section of the loan agreement to get the most from a home loan.