If you’re planning to take a home loan at the age of 40 or above, it’s crucial to follow certain strategies to ensure that the loan does not become a financial burden.
Here are five essential tips, as advised by banks, to help you manage your home loan effectively:
1. Opt for the Maximum Loan Tenure
Banks generally offer home loans for up to 30 years. However, if you’re 40 or older, the tenure may be reduced due to retirement age.
If you have a good credit score and a stable job, you can negotiate with the lender to extend the loan tenure beyond retirement. A longer tenure reduces the EMI burden.
2. Consider a Joint Home Loan
If both you and your spouse are earning, opting for a joint home loan can increase your loan eligibility and reduce the EMI burden.
Making your spouse a co-applicant can also lower the interest rate and provide additional tax benefits.
3. Make a Larger Down Payment
To lower the overall burden of the home loan, try to make a bigger down payment. This will reduce both the EMI and the interest cost.
However, ensure that you don’t compromise funds set aside for emergencies like medical needs.
4. Make Lump Sum Repayments
Aim to complete your loan repayment before retirement by making lump sum payments when possible.
Use bonuses, gratuities, or inherited funds for this purpose. However, avoid using your retirement savings for loan repayment.
5. Choose the Right Lender
There are many home loan providers available today, so it’s essential to research thoroughly before selecting one.
Look beyond the interest rate and consider other factors like the lender’s reputation, flexibility in repayment, minimal paperwork, and the lender’s ability to guide you properly.
