Totally investing time and energy into finding the perfect home can be a daunting task. Visiting multiple builders in different areas of the city to identify the one who has the home you want for sale is never a cakewalk. And that’s not all! Now comes the part when you need a loan from a bank or a home finance company like LT housing finance to pay for the house you want to buy.
Most of us will look for a housing loan that offers the lowest possible interest rate, minimal fees, and the fewest formalities to go through in order to acquire the money we need as a loan.
But nowadays, lenders provide a wide variety of flexible payment plans to meet the needs of their customers.
So here are the several options, besides the usual regular EMI option, for loan repayment, from which a housing loan EMI borrower can choose:
Delayed EMIs
Many financial institutions give borrowers the option of delaying the first equated monthly instalment (EMI) payment. The flexipay Muthoot finance home loan policy is offered by some financial institutions, and it allows borrowers to delay payments (the “moratorium period”) for a period of time between 36 and 60 months. During this time, they will only be responsible for the interest accrued prior to the initiation of EMIs. Once the grace period ends, the EMI will begin and grow annually at a set percentage. This loan is unique in that it allows borrowers to put as little as 20% down on a home and still get a loan. It is important to note that this type of loan is restricted to salaried and employed professionals aged 21 to 45.
Savings or current account linked EMI.
If you open a checking account at the same time as your mortgage, you may be able to link the two accounts. The amount of interest you must pay on your lt housing finance home loan is based on the sum of money you have in your checking account. The current account allows for convenient deposits and withdrawals. Your mortgage interest rate will be determined by taking the total amount borrowed less the available funds from your checking account.
You might, and for instance, you have a Rs 50 lakh Muthoot finance home loan at 8.5% for 20 years. The interest on a typical loan would cost you about Rs 54,13,875. If your loan is linked to your bank account, however, you’ll pay only about Rs 52,61,242, saving you almost Rs 1.53 lakh over the life of the lt housing finance loan. It’s important for borrowers to understand that while the interest load on these loans would be lighter, the EMIs will still be greater because of the higher interest rate.
Rising EMIs
Consider the Step Up Repayment Facility provided by several financial institutions if you’re interested in a house loan with an EMI that keeps rising after the initial few years. These loans allow you to borrow more money at a cheaper interest rate for the first few years. The loan’s repayment schedule is then adjusted upward to reflect the anticipated increase in your income. This loan has no grace period, and the full EMI begins on day 1. The interest you pay on loan can be reduced if your EMI payments increase over time. The target audience for this choice is people who anticipate a rise in income in the not-too-distant future.
Lump Sum repayment
When taking an lt housing finance loan for purchasing a property that is still in the construction phase, you normally just have to make interest payments on the loan balance until the final payout, after which you will begin making the EMIs. You can choose to begin making payments toward the principal on the total amount issued at any time by switching to an accelerated payment plan. Interest will be deducted from the payment, and the remainder will be applied to the principal. For a loan of Rs 50 lakh, an EMI of xx per month will reduce the principal balance to around Rs 36 lakh by the time construction is complete. The new EMI will be lower than the one you’ve been making payments on for the past 36 months. It’s important to note, however, that any principal payments made during construction will not qualify for a tax deduction.
EMI Payment Waiver
A Fast Forward Muthoot finance home loan is a type of loan that offers a repayment option in which 12 EMIs are forgiven in exchange for on-time payment of the remaining balance. After ten years, payments are suspended for six months; after fifteen years, payments are suspended for another six months. In this plan, you can take out a loan with a term of 20-30 years.
A telescopic repayment mortgage is a good option for borrowers whose eligibility for a house loan limits the total amount they can borrow. Those just starting out in their careers, among the younger generation, will find it to their liking. By increasing the length of the loan payback period to 30 (thirty) years, increasing the maximum loan amount you can borrow, or decreasing the EMI amount, borrowers can take advantage of this program’s loan offerings for larger amounts.
What to do?
The flexibility and lack of restrictions of a “plain vanilla” lt housing finance make it the better option. However, you may want to consider one of the aforementioned alternatives if you find yourself in a unique financial situation that calls for a different approach. Meet with your banker or a trusted financial advisor to discuss your current financial condition, income projections for the next few years, and loan options. Don’t overlook the interest you’ll have to pay during the life of the loan. If you want to avoid paying interest for as long as possible, you should make a plan to pay off your Muthoot finance home loan debt soon.
