Whether you’re buying a house for the first time, or are looking to buy another one to add to your forte, the first step you must always take is opting for a home loan. Acquiring a loan is not the hardest part. Covering it is. Now, we don’t want to demotivate you, and that is not our intention. Our aim with this article is to help you get through a loan in the most effective way possible. This means getting through a loan which will not affect your credit ratings negatively, avoiding extra fees and costs, and making your payments completely affordable to a great extent. The topics covered in this article will help you stay within your debt, and will most definitely help you get that dream home you have always wanted.
Read on to know four ways how you can simplify the entire process, and cover your loans effectively and promptly!
Understand the Loan that You Are Taking
Let’s say that you have two loans at the moment currently, and you want to opt for a third one. The smartest thing to do here, is to constantly keep tracking each and every loan that you have opted for. The important things to keep track of in this situation is the lender, the balance that you have to pay to successfully reimburse it, and the loan repayment status. By keeping track of your loans, you will know how much you will have to pay every month, and hence it would be considerably easier for you to understand how much money you have yourself to spend.
Ensure that you are in Touch With Your Lender
If you’re planning to move somewhere, or will not be available in the city for a period of time, you need to let your lender know this. You will definitely get the number of a representative that you can keep in touch with for purposes like this, and it is very important that you communicate these things with them. If the representative wants to get in touch with you and this is not possible, it could steer your relationship and any other communications through the wrong path, and this is something that you don’t want. To avoid this, you should also open and read each and every mail or message that the lender sends out to you. Even if you think you are getting calls that waste your time, you should still stick with it, and talk to them! You have to understand that they’re just doing their job, and ignoring such calls, or messages can get you into severe consequences that you will not be able to avoid. You should also not ignore your bills, as that could backfire badly upon you.
Choose the Right Tenure
Any bank loan requires the borrower to choose the right tenure to repay the loans back. If you’re okay with a ten-year option, then go for that. If you can only afford a twenty-year tenure, then you should go for that. While choosing the right tenure, you should ensure that you are able to afford it completely. There is absolutely no point in you choosing a short tenured loan that you won’t be able to afford. On the other hand, if you are able to afford a shorter tenure, it works well for you in the long run because banks do not charge high interest rates for such loans, and if you think about it, are very lenient towards short tenured loans. However, you do need to plan out extensively, and figure out your capabilities before choosing a loan of certain tenure.
Pay it Faster if You Can
Every single time you feel you are able to afford a higher amount than the amount you are required to pay every month. Pre-paying your loans is a great way to increase your chances of closing the loans as soon as possible. There are a lot of advantages associated with this, with the major one being that you can cover up later on, when your situation is a bit on the tighter side. Another one is that you can considerably lower the interest rates of your loans when you do so. Pre-paying increases the chances of your bank lowering the interest rates majorly. What you need to be aware of is the fact that once you opt for pre-payments, the same amount of money will be debited from your account. If you want to go back to the initial payments that you make, you have to write a letter to the bank stating that you do not want to pay the same amount of increased money for the month. They will automatically debit the initial amount of money you would have had to pay every month, and every time you want to make a prepayment, you have to follow the same process. But what you have to ensure is that you should use this option only in certain short periods of time, that is occasionally, because it does not make monetary sense if you choose to do so every single month.
Know any other methods? Do let us know in the comments section below and do stay tuned for more in-depth coverage!