Real estate investments have forever been a lucrative way to earn money. Whether you wish to buy a house for investment or wish to live in it, this can be the best time to purchase a property. With both property prices and interest rates hovering around their multi-year lows, a home loan can fulfil your dream of owning a house much earlier than you can imagine.
PNB housing home loans have always been a preferred choice of borrowers willing to invest in or purchase a property. With a PNB Housing home loan, you can get low rates of interest, easy eligibility, minimal documentation, long loan tenure, and an uncomplicated application process. Moreover, facilities such as doorstep delivery of services and an extensive branch network make applying for the home loan a simple task.
Here is how you can extract the maximum benefits from a home loan like the PNB Housing home loan.
Manage Your Money Efficiently
Financial independence begins with budgeting. Only when you know what you earn, how much you should save, and what you should spend is when you can claim ownership on your money.
While PNB Housing home loans come with transparent terms, meaning no extra costs, it is better to align the EMIs with your financial goals.
While creating a budget, it would be best if you divide your monthly income into four broad heads – fixed expenses, savings, discretionary expenses, and emergency corpus. You can reserve 40% of your net income for fixed expenses, 30% for savings, 15% for discretionary spending like PNB Housing home loan EMIs, and 15% for the emergency corpus.
A no-frills loan, like the PNB Housing home loan, comes with no added tension, and hence can fit in perfectly into the 15% you allocate towards the discretionary spending.
Be Open to a Short Term or a High EMI
When you apply for a home loan with PNB Housing, you will get a repayment term of up to thirty years. If you choose the highest term, your EMIs would be substantially lower, making the loan easily accessible. However, a high loan term also brings with it-high interest rates.
If you want to pay less interest, there are two options. The first option is to increase the EMI, and the second option is to decrease the loan term.
In both cases, your EMIs will increase. But, by paying early, you can close your loan earlier, which will give a boost to your credit score.
On the positive side, you can claim a tax deduction of up to INR 2 lacs on the interest component, under Section 24. Moreover, you may claim a tax deduction on the principal component of up to INR 1.5 lacs, under Section 80C. Section 80EE enables you to claim an additional tax benefit of INR 50,000 if you are a first-time homebuyer. It is better to use a home loan calculator to find out how much you can save in this process.
While an increase in EMIs will undoubtedly increase your financial burden, the various tax deductions can make the deal much sweeter.
Make Part-Payments as Many Times as You Can
Part-payments are a sure way to reduce your loan obligation or reduce your loan term. You can use any windfall gain you receive through office promotion, selling shares or mutual fund units.
In most cases, lenders do not charge anything when you make part-payments. However, it depends on the lender. You may use an online home loan calculator to see how much you are saving by paying early.
Hence, it would be best if you inquire about part-payment or foreclosure charges before applying for a home loan, like the PNB Housing home loan.
Keep Balance Transfer On Your Radar
A wise way to reduce your loan liability is by opting for a balance transfer scheme. If your loan is on a floating rate of interest, your EMIs will depend on the interest rates offered by your lender. For example, while some lenders still charge interest at 9% and above, PNB Housing home loan interest rates start from 7.50%.
You can opt for the balance transfer facility in such cases. The balance transfer facility enables you to transfer your outstanding liability to a new lender.
Hence, by opting for the balance transfer scheme, you may save a lot of money on your remaining EMIs.
Conclusion
PNB Housing home loans are best suited for anyone, as you can apply for home loan irrespective of your credit score. As you continue paying the EMIs on time, your credit score will automatically improve. And, as your credit score improves, you can reap the benefits of discounted interest rates. So, it’s high time you open a home loan calculator and see for real how far you are away from your dream home.
