6 Smart Home Loan Repayment Strategies for Women

In March 2024, a report released by credit bureau CRIF High Mark revealed that the share of women home loan borrowers stood at 33%. The gradual surge of women applicants is a positive sign for both the industry and India’s economy. That said, once you take a loan, the EMI obligation seeps in. And if you’re not careful with your money or don’t have a home loan repayment strategy in place, things could get difficult, financially. 

In this blog, we have shared smart home loan repayment strategies you can consider to pay off your loan without stress. Let’s dive in!

Home Loan Repayment Strategies for Women

1. Calculating EMIs and Planning Finances

   Calculating Equated Monthly Installments (EMIs) in advance is crucial. This allows you to plan your finances effectively and manage monthly payments without stress. To calculate your housing loan EMI, you can use an online housing loan calculator. Let's look at an example:

    

   Example: Suppose you took a loan of ₹60 lakhs for your new home at an interest rate of 8.50%. Using Ujjivan Home Loan EMI calculator, the EMI would come up to approximately ₹52,069. Now you can plan how much money you need to set aside just for EMI.

    

   Pro-Tip: Open a high-interest Savings Account and link it to your Home Loan account to pay your EMIs.

    

2. Part Payments to Lower Interest Rate Burden

   One of the best ways to save on interest payments is by making early repayments on your home loan. By paying extra towards the principal amount, you can reduce the interest burden and shorten the loan tenure. 

    

   Some of the part payment tips would include using bonuses, budgeting, maintaining financial discipline - all of which could leave surplus amount for early home loan repayments. That said, kindly check with your bank if there are any part payment charges. Usually, banks don’t charge part payment or full repayment fees for floating rate home loans.

    

3. Opting for Flexible EMI Options 

   To provide greater flexibility to borrowers, some lenders offer the option to choose a flexible EMI structure. This allows you to increase or decrease your EMI amount based on your financial situation, such as a salary hike or an unexpected expense. By adjusting the EMI amount, you can align it with your cash flow and manage your finances more efficiently.

    

4. Balancing Home Loan Repayments with Other Financial Goals

   While repaying your home loan is essential, it's equally important to balance it with other financial goals. It's wise to have a holistic approach and prioritise saving for emergencies, retirement, and other investments alongside home loan repayments. By managing multiple financial goals simultaneously, you can ensure a secure and well-rounded financial future.

    

5. Refinancing Options for Lower Interest Rates

   If you find that interest rates have decreased significantly since you availed of your home loan, refinancing can be a viable option. Refinancing or balance transfer allows you to switch your existing loan to a new bank offering lower interest rates, thereby reducing your overall interest burden. However, it's crucial to consider the associated costs and benefits before making a decision.

    

6. Making Use of Tax Benefits

   One significant advantage of taking a home loan is the tax benefits that come with it. Under Section 80C and Section 24(b) of the Income Tax Act, you can claim deductions on the principal repayment amount and the interest paid on your home loan. These deductions can help reduce your taxable income and increase your savings.

    

By leveraging these home loan repayment strategies, you can achieve financial independence and secure their dream homes more effectively.

Any Other Home Loan Benefits for Women?

1. Reduced Stamp Duty

   In many states, women benefit from lower stamp duty rates when purchasing property, typically saving 1-2%. While this may seem small, it can amount to substantial savings on high-value properties

    

2. Government Schemes

   Programmers like the Pradhan Mantri Awas Yojana (PMAY) offer additional benefits, including interest subsidies and preference for women applicants. This government initiative encourages co-ownership among couples, further promoting women's participation in home ownership.