A secure and convenient way to acquire substantial funds, mortgage loans have become quite popular these days due to easy accessibility and attractive interest rates. However, one must plan their finances in advance and should also be aware of additional methods to pay off your loan as early as possible for avoiding liquidation of your precious commercial/ residential property.
Following are the ways to pay off your mortgage loan in 2021.
- Pick your lender carefully
One should do thorough research regarding the loan against property interest rates and benefits before finalizing the lender to acquire the best deal available in the financial sphere. Choosing the right lender with the lowest interest rates will in turn help you in achieving affordable EMIs and help you in repaying the amount in the shortest time.
- Minimize the expenses
Another efficient way to repay the loan amount at the earliest is by planning your finances and fixed monthly expenditures to ensure timely EMI submissions. You can choose to cut down on unnecessary expenses such as buying the latest gadgets or planning expensive trips until you close the loan completely.
- Deposit part-prepayment
One of the most effective ways to pay off your mortgage loan is by depositing a prepayment that will reduce the principal which in turn will decrease the total EMIs. Hence, you should do a part-prepayment whenever extra money is at your disposal or make a habit of an annual prepayment to achieve your target with ease.
- Decrease your tenor
While it is recommended to choose the loan tenor upon assessing your financial condition, you can take a risk and opt for a shorter tenure which shall help you repay the loan quickly. While it will lead to higher EMIs, the interest burden will be quite low in the total repayment amount in such cases. Hence, the overall amount will be less as compared to the ones in case of longer tenures.
- Make use of tax refund
Another great method to pay off your EMIs early is by availing your home loan tax exemptions. Under sections 80C, 24(b), and 80EE, you can avail tax benefits up to Rs. 1.5 lakhs, Rs. 2 lakhs, and Rs. 50,000, respectively.
- Avoid delays in submitting EMIs
An easy and efficient way to pay off your loan against property is by submitting the EMIs on time and in full. Delaying or missing out on making timely payments could lead to 2% penal interest. Additionally, it will also impact your credit score in a negative manner. To avoid such situations, you must deposit the monthly installments within the due date.
- Home loan balance transfer
To close off the mortgage loan, you can also choose to do a home loan balance transfer from one bank to another for availing low-interest rate, provided you are in the first half of the loan tenure.
- Rent out your space
Last but not the least, you can choose to rent out a portion/ floor of your home or apply room partition ideas to achieve the same and increase your EMI affordability. Along with constant monthly earning, you are also entitled to income tax benefits for a rented-out property.