Many people resort to housing loans to make their dream home a reality. When taking out a loan, they have to repay it on time. Also, the interest on home loans is a bit higher compared to other loans. Therefore, if you have money in hand, you should pay it immediately and redeem the bond, and bring it home. Some people will start thinking about how to pay the home loan if they get a salary increase or annual bonus. Some will also think that should they increase the EMI amount. Or should they pay the lump sum in advance? Which of these 2 options is better? Is it better to increase the EMI amount? Or is it better to deposit the money in advance in bulk?
 In this post, we will look at this.  What are the benefits of increasing the EMI amount?: You can pay off the loan faster: Increasing your EMI amount will speed up the repayment of the principal amount. This will reduce the loan tenure and reduce the interest.

You can improve your credit score: If you pay the EMI amount more, your credit score will improve. This will make it easier to get a loan in the future.

Flexibility: As your income increases, you can also increase your EMI amount to reduce the loan tenure and reduce interest payments.

Disadvantages of increasing the EMI amount: When you increase the EMI amount, it can affect your monthly expenses. If you can handle everything, there is no problem. Some people think that when they get extra money, they should spend it. However, paying the entire EMI amount may seem difficult.

What are the benefits of paying money in advance?:
 Flexibility: If you get money in advance, you can use it to reduce your debt burden.
 Interest savings: If home loan borrowers are repaying the loan throughout the loan term, they may feel that they have paid interest equivalent to the loan taken. To avoid this, when paying money in advance, you can pay only the principal. This can reduce the interest.

Disadvantages of paying money in advance: If you repay the loan with it when you have money in hand, you will avoid investing in other projects. This may result in you not getting the income you will get later. Whether to increase the EMI amount or repay the loan in advance depends on the financial condition of the person. If you can handle the monthly expenses by increasing the EMI amount, then you can ask the financial institution from which you borrowed the loan to increase it. That is, those who want to pay it in advance and complete the loan when they get money in hand, can go to the bank and credit it to the principal.
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Sowmiya Sriram

30/04/2025 01:33 PM