Availing home loans for constructing or purchasing a new house can lead to financial strain owing to a higher financing amount. For such reasons, individuals often opt for longer repayment tenor to make EMIs affordable. However, longer tenor increases the total payable interest and the cost of the loan.
Hence, paying higher EMIs is beneficial. Apart from that, borrowers also opt for home loan prepayment or foreclosure to reduce the outflow.
Significant benefits of higher EMI pay-offs
- Individuals who opt for shorter tenor have to pay high EMI, which is significantly beneficial. Higher EMIs reduce the cost of the loan by lowering the total payable interest on the principal. Thus, calculating EMIs before taking a home loan is beneficial.
- An individual who has opted for high EMIs can repay his/her home loan quickly. Doing so enables borrowers to have mental peace since the debt is getting paid faster.
To reduce financial obligations apart from paying high EMIs, borrowers can also opt for home loan prepayment. Prepaying the home loan enables borrowers to pay a large portion of the principal. Thus, they can either reduce their EMIs or home loan tenor. Prepayment also lowers the cost of the loan.
To ensure a systematic approach towards clearing off loan debts, individuals should consider calculating their EMI payments using an online home loan calculator to avoid any financial ambiguities.
