Home Loan EMI: Keep these 5 things in mind while taking a home loan, most people make mistakes..

Home Loan: While taking a home loan to buy a house for the first time, some important things should be kept in mind. To avoid a shortage of money, middle-class people often resort to loans. While taking a loan, assess the correct interest rate, EMI amount, and your financial situation.

Also, understand the terms and duration of the loan. Also, keep in mind the tax benefits as this can reduce your burden. By taking a loan with the right information and planning, you can avoid financial difficulties and repay your EMI easily.

Evaluate the financial situation-

While taking a home loan, assess your income as well as your current expenses and debt. By doing this, you will know how much amount you should take as a loan from the bank. Which you do not have trouble paying in EMI. Taking a large loan will increase your EMI. Which will not be easy to manage.

Keep the loan period short-

Keep some important things in mind while taking a home loan. First of all, keep the loan period short, so that you can repay it quickly by paying less interest. In a short period, you will deposit more principal, which will finish the loan quickly. Along with this, try to give at least 20 percent of the house price as a down payment. By making a higher down payment, the loan amount is reduced, and this also reduces the interest. In this way, you can reduce the financial burden.

Increase EMI when income increases-

If you increase your EMI when your income increases, then your loan will finish quickly. Because by paying more EMI, you can pay more principal amount of the loan. This reduces the period of your loan. After the loan is over, you can plan to invest with your money.

Get your loan insured-
The loan is a liability, so while taking it, you must get the loan insured to protect your family. This insurance is offered in most banks while taking a loan. If you get the loan insured, then in case of any untoward incident, the responsibility of repaying the loan will not fall on your family. The insurance company will pay for it. This will prevent the financial burden of the loan on your family.

Compare the features of the loan-
When you think of taking a loan, it is essential to compare the loan features of different banks. Check which bank is offering more benefits. There are a lot of differences in interest rates, loan amount, LTV ratio, loan tenure, and processing fees among banks. Along with this, your credit score is also important. A better credit score increases your credibility and the chances of getting the loan approved are also higher, which can also get better interest rates.

Must read the loan agreement-

While taking a loan, the bank gets an agreement signed. People do not read it properly and sign it. Whereas no one reads this agreement properly. Interest rate, loan period, repayment period, prepayment charges, penalty on late payment. Also, all the things related to the loan are written in the agreement.

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