A home loan is just the start of a long financial journey. Paying off a home loan is a long and expensive commitment, and tracking your home loan can help you spot hidden fees, pay off the loan on time, and save money in the long run. Here are some actions that can help you easily master your home loan.
Visit your online lending portal
When disbursing your loan, the bank gives you access to the home loan portal. This portal comes with a number of tools that help you track your EMI repayment, know current and past interest rates charged on the loan, outstanding amount, and other details related to your home loan. Whenever there are revisions to your loan – be it the interest rate or the terms and conditions – everything is reflected here. You should check this portal regularly to stay up to date with any changes to your loan.
Check your loan statement
Similar to a savings account, the loan account also lets you access an account statement. It’s a good habit to check your home loan statement regularly. The statement contains loan details from when it started, and checking the statement regularly helps you keep track of what you’ve paid so far and what’s left to pay. You will know if your EMIs are credited to your loan account on time. A home loan statement can also be useful while claiming the U/S 80C or U/S 24 tax deduction. lender’s mobile application. A loan statement can be very useful to follow the interest rate applied by the bank and to know when the bank changes the interest rate applicable to your loan.
Read the credit report
The credit report reflects information that the lender has updated to the credit bureaus. There are instances where the lender reports incorrect information to the credit bureau, which can negatively impact your credit score. Checking credit reports regularly can help you take corrective action if there are any discrepancies or mismatches in the information reported to the bureaus. The credit report can also help you check your records and the lender’s records of EMI payments. Strict monitoring of your credit report can also help you maintain a high credit score.
Check the amortization schedule
Adhil Shetty, CEO of Bankbazaar.com, suggests, “The interest rate is one of the most important parts of the home loan process. A small increase in the interest rate can make a huge difference in your overall repayment obligation. It is therefore crucial to follow the interest rate charged by the lender and to understand the impact of the variation in interest rates on the cost of the loan. Similar to the loan statement, the amortization schedule shows interest rates and past payments. In addition, it also shows the number of outstanding EMIs after the rate change and a detailed breakdown of the principal and interest components of the EMI. This data will show you the exact impact of the rate change and give you a clear idea of the corrective actions you need to take in order to keep your overall interest outflows within limits.
Conditions of the loan agreement
When the interest rate increases, borrowers can choose a longer term or increase their EMIs. If the borrowers do not approach the lender with a preference, the bank follows the default option according to the terms and conditions mentioned in the loan agreement. Typically, this is an extension of duration as opposed to an increase in NDEs. This is just one of several terms and conditions covering everything from how the interest rate is calculated, to the structure of EMIs, to prepayment, penalties, and more. You must therefore read the loan agreement carefully to closely monitor your home loan. A loan agreement also plays an important role in understanding the fees charged by the bank and knowing the procedures when considering pre-closing your loan or transferring the loan to another bank.
The home loan journey only begins with a loan. Being a smart borrower can protect you and save you a lot of time, energy and, of course, money and make your journey as a homeowner easier. I hope these tips will make your home loan journey easy and happy.