Home loan EMIs can be a nightmare.
While you do have the satisfaction of knowing you will eventually own your home, you also have to grapple with having to spend less money, with fewer treats, with giving up on luxuries that you would otherwise have enjoyed.
We asked Get Ahead readers to share their EMI stories and advice. Here's what Sunil Agarwal from Kolkata has to say:
I am a 28-year-old chartered accountant working as a functional consultant with a top IT company in India. Prior to this job, I had worked as an operations manager in a leading housing finance company in India.
Recently, I took a home loan of Rs 16 lakhs in Kolkata. With my past job experience with home loan customers -- besides, this is what I personally believe as well -- I feel it's always better to keep the monthly EMI as low as possible.
Our salary comes only once a month, but we spend that money for 30 days. So, if you has the option, the monthly EMI commitment should not be on the higher side.
It is true that increasing the EMI will reduce the term of the loan. But, if a single EMI cheque bounces, you will have to pay a hefty penalty. Besides, your credit history goes for a toss. Click here to find out why your credit history is important.
So, how you will divide your monthly salary between your EMIs and other important expenses (like your child's tuition fees, grocery bills, electricity and phone bills, society charges, etc)? You also need to consider what other liabilities you may have in the near future.
If you feel that your money won't stay in your savings account because you tend to spend, here's a simple solution:
~ Open a recurring deposit account in your bank for a short term, say one year.
~ Give a standing instruction to your bank to transfer a fixed sum every month from your salary account to this deposit account.
This way, you will reap multiple benefits:
~ The idle money in your account will be earning you a higher rate of interest (it will at least earn you some interest and it is better than spending it impulsively on a gizmo or some such thing).
~ By the time your deposit account matures, you will have a lump sum amount, and also an option -- whether to prepay part of your home loan or use the money otherwise.
~ If you decide to prepay part of the loan, you can reduce either the tenure of your loan, or the amount you pay each month as EMI.
Believe me, this will help you overcome your home loan woes.
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How to cope with your home loan EMIs
Are you facing a similar problem? Have EMIs crippled your life as well? If yes, how are you coping? Are you cutting down on your monthly expenses? Are you borrowing to repay your loan?
What solution have you developed for your home loan problem? Share it with other Get Ahead readers.
We will feature the best and the most imaginative/ practical solutions to home loan woes right here. Make sure you include your FULL NAME, AGE, OCCUPATION, HOME LOAN AMOUNT, THE INTEREST AT WHICH YOU HAVE TAKEN THE LOAN and the CITY you are based in.
Your advice could help others manage their home loan problems. Write in now.
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