Smart ways to reduce the property loan burden

It is a great feeling to own the dream house. However, paying a significant portion of your salary for home loan EMI is a huge financial burden which weighs down a monthly budget of a person. And to keep paying the sum of money for the tenure of your property loan which is usually a period of 10 to 15 years, feel infuriating. So, how to lighten your debt burden? Here are easy steps save money in the long run.

• Closer look at your financial plan: Before considering a property loan and financing options, it is essential to have a closer look at your financial plans. Check the number of investments you have and the returns you are getting. If your investments are taking care of your short, medium and long-term financial goals, then you can think about directing the surplus towards the property loan. While choosing property loan, tools like home loan EMI calculator can help you get an idea about the amount you need to pay for your property loan.
• Higher down payment: While getting your loan sanctioned, opt for making a large down payment; it will help cut down the principal amount. Remember, interest payment is calculated on the principal. So, you will need to pay lower interest with the smaller principal, thus, lowering the burden of EMI. A large down payment might seem a bit difficult; however, it will prove beneficial in the long run, and you can save significantly in EMI payments.
• Research: A little time invested in researching about property loan companies before availing a property loan can help you find lower interest rate offers and save a lot. If you have already taken a property loan and want to lower the interest rate now, then you can think about the transfer of loan. You can go for other financial institution that might be willing to offer you a loan at a lower interest rate. Therefore, refinancing your property loan at a reduced interest rate can be a smart way to lower your interest repayment burden. Remember, you will need to consider the charges for switching the loan including legal fees, processing fees, etc. before finalizing your option. 
• Choose EMI amount and tenure wisely: Selecting an extended loan period means lower EMI, as principal and interest are divided over a longer period. You need to understand something important; you will have to pay EMI and interest even if your monthly income is less or inconsistent at times. Your monthly EMI amount can be smaller but you may have to pay more over your loan duration. On the other hand, shorter loan tenure will reduce your absolute interest payout; however, it will increase your EMI burden. So, go with the EMI amount that you can afford. Affordability should be your primary factor while selecting your loan EMI amount.
• Early Prepayment: This is the way to reduce your debt burden significantly. Prepaying part of your loan in the first months/years of the loan period can decrease your principal. Thus, you can save you interest on later payments. Furthermore, making partial payments whenever possible can help you save a lot in the long run. Another useful trick to reduce the burden is to keep the habit of planning one more EMI (than the usual number of EMIs) every year.

So, what are you waiting for? Think wisely and act smartly to ease your property loan burden.