Like marriage, a home loan is a long-term commitment with your lender. We understand life gets unpredictable at times, and that is the reason we have made a simple plan that will help you pay your EMIs on time and never miss them.
Fundamentally, you must keep three things in mind:
- Actively plan and track your expenses, especially for festivals like Diwali
- Trust the system and opt for automated EMI from an active account
- Keep a 3 months emergency fund, that can sustain all your expenses
How to plan for EMI payments?
It is vitally important to first weigh one’s finances before proceeding to take a home loan. As a thumb rule, your EMIs should not exceed 50% of your monthly income; leave scope for medical emergencies or any kind of unexpected costs while still keeping up with your EMI commitments. So, before taking a home loan, go online and use the EMI calculators to help understand where you stand financially. Do not take a loan on future income prospects. You should not feel financially burdened.
Tracking expenses is becoming more critical with digital payments. Our small, everyday transactions often go unnoticed and by the time we are in the 2nd or 3rd week of the month, we are cash-starved.
Set up automated EMI payments
Most lenders let you connect your bank account for automated deductions on the due date, making you less likely to be late with your EMIs. Such a practice minimises risks associated with missing deadlines. All you need to do is keep cash in that account. If you expect to face some kind of financial setback and are unable to make an EMI payment, communicate this with your lender well before it misses the EMI. Lenders generally reward proactive borrowers by allowing a date extension on repayments or a grace period of a few days.
Create an emergency fund
Having a 3-month emergency fund is a financial safety net that can provide peace of mind and stability in uncertain times. This easily accessible savings cushion covers essential expenses, ensuring you can weather unexpected events like job loss, medical emergencies, or unexpected repairs. By setting aside three months’ worth of living expenses, you will avoid going into debt and maintain financial independence. It’s a wise precaution to safeguard your financial well-being, reduce stress, and focus on long-term goals.
“Remember, discipline today means a debt-free tomorrow! You will confidently navigate life’s twists and turns, ensuring your dream home remains a haven, not a burden. Stay on track, and happy homeownership”
(Author is the CMO of HomeFirst)
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
