{"id":1474,"date":"2016-05-16T17:53:29","date_gmt":"2016-05-16T12:23:29","guid":{"rendered":"http:\/\/easybankingtips.com\/?p=1474"},"modified":"2017-04-29T15:50:36","modified_gmt":"2017-04-29T10:20:36","slug":"home-loan-prepayment-tips","status":"publish","type":"post","link":"https:\/\/easybankingtips.com\/home-loan-prepayment-tips\/","title":{"rendered":"5 Traps for Your Home Loan Prepayment (How to Avoid Them)"},"content":{"rendered":"
Prepaying a home loan is a great idea because it saves you from stress of paying EMI\u2019s (Equated Monthly Installments).<\/p>\n
There are different ways to prepay a home loan; however, you may choose a particular prepayment method over others depending on several factors such as your monthly earnings, investment options and liquidity.<\/p>\n
Choosing the right prepayment method is key to your happiness because choosing to prepay your home loan the wrong way can lead to stress and regrets.<\/p>\n
Here are some common traps that home buyers fall into when they blindly go for a prepayment.<\/p>\n
Using a large chunk of your savings to close a loan is not always a good idea. You may be forced to take a personal loan in the event of any emergency which means you will have to pay a higher rate of interest than your home loan. It also means you lose out on a potential investment option that could pay you better returns.<\/p>\n
Many banks offer refinancing options to home buyers in order to<\/p>\n
Basically, the bank takes over an existing loan at a lower rate.<\/p>\n
To do you this favor, banks often charge a hefty one-time fee in terms of processing charges. More often than not, this one-time fee would be much higher than the amount you would save by getting a lower EMI on your refinancing.<\/p>\n
Consider this aspect while going for refinancing product.<\/p>\n