Key Insights When Choosing The Home Loan Repayment Option

When you opt for a home loan repayment option, you are making an important decision for the entirety of the loan tenure. It is mandatory that you keep up with your repayment amount and schedule as assured. However, different kinds of housing loan repayment options have different factors that you need to consider. While most of the options necessitate that you make a dependable and accurate estimate of your future financial plans, it is a bit more complex than that.

Accelerated Repayment:

This repayment strategy is suitable for professionals with their own practice. Even, businessmen can consider it. The primary idea is to repay as much part of the loan as quickly as you can. For fixed salaried people though, this is not possible. But, people on business income can consider it and repay it strategically. Yet, this scheme can be rendered useless if your incomes are dipping below the ordinary; which is a normal possibility in professional practices and businesses.

Step Down Repayment:

This is a suitable choice for a father-son team or mother-daughter duo. It is expected that the elder partner will take care of the house loan repayment before retirement and the younger one will attend to it after that. Yet, the primary assumptions don’t include other details. For example: If the elder partner is retired and younger one is married and has other responsibilities, what would you do? How do you pay the EMIs? You will need to cut down your expenses considerably to make funds available for this kind of home loan EMIs.

Step Up Repayment:

This is a great repayment option for people in their twenties. It is a logical expectation and assumption that their current salary or business turnover will grow over time. But, the truth is that accelerated repayment plan should also be taken with a hint of caution as you will need to meet the demands of higher repayment over time. You must increase your income accordingly to meet these demands.

Housing finance companies in India understand the need to repay comfortably today and tomorrow. Hence, these kinds of options are created. Each and every one of them, however, needs to be chosen cautiously; because certain possibilities may arise that may not allow you to repay the home loan comfortably. So, watch out for your finances and forthcoming trends before making any decision. It will be as vital as the home loans interest rates, EMIs and the home loan tenure.