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Where to Find Plutocrat for Home Loan Prepayment?

Where to Find Plutocrat for Home Loan Prepayment?

Many weeks back, I wrote about the impact of RBI repo rate hikes on your home loan EMIs. RBI Repo rate hikes will snappily restate to longer loan tours or advanced EMIs for the borrowers, especially if your loan is linked to an external standard.
still, your yearly budget will remain untouched and you may still be fine, cashflow-wise, If there’s a compass to increase the loan term and not change the EMI. still, if the EMI goes up, your yearly charges may go over and you can face a cashflow crunch. Not good.
My limited experience is that the cashflow struggle keeps you under constant pressure and that’s not good for your health. There may also be an adverse impact on your particular and professional lives too. Hence, avoid the cashflow crunch.
And how do you do that? A way out is to make a partial loan repayment. A repayment would reduce loan outstanding and therefore bring the EMI( or loan term) back to the situation before the rate hike. Another is to shift to a lender that offers a lower rate but let’s assume this isn’t a possibility. You’re formerly with a cheap lender.

Back to the repayment option. still, there’s a problem. It’s easy for me to ask you to compensate your loan by many lacs but where will you find plutocrat for similar repayment? A many lac rupee is no small change. In this post, let’s look at some of the avenues that you can use to induce the important- required cash for home loan repayment.

1 Use Your Periodic perk

Not everybody has this luxury but if you do, this is the smallest hanging fruit. There’s no impact on your yearly cashflows moreover. I’m sure numerous of you formerly use periodic perks to compensate for home loans regularly. The perk is generally sizeable, compared to yearly hires. Hence, you would see a veritably nippy impact. However, you might want to review the precedence, If you had planned expenditure from those periodic lagniappes.

2 Use a Bit from the Emergency Fund

This is a parlous suggestion. However, also you can withdraw a bit from the exigency fund and use the quantities for repayment If the exigency corpus is robust. Don’t overdo it. Can fluently backfire. However, you may haven’t much left when a real exigency arrives, If you dip too much into your contingency fund.

3 Hand Loan from Family/ musketeers

A short-term loan from family or a friend can also come in handy. You can suppose such a loan as a ground loan. You anticipate cash flow from any source( FD or life insurance maturity.) in many months. You take a short-term loan from a person close to you, compensate the home loan, and return the plutocrat to your family musketeers when you get the redemption/ maturity proceeds. still, before requesting a loan from a close friend or family, figure out the prepayment plan for that loan. You don’t want plutocrat matters to affect your connections.

4 Sell/ Break a Being Investment

still, there’s a case for breaking the bank fixed deposit and using the proceeds to reduce your home loan liability, If you have a bank fixed deposit that yields 5 and a home loan where you pay 7. I assume such a fixed deposit isn’t part of your contingency fund. And you don’t have to stop at just bank fixed deposits. You may have other means too. Stocks, bonds, gold, collective finances.
This should be the last resort. However, consider dealing with a portion of similar means too, If the drive comes to push. I know, “What about my long-term pretensions ” and all that? I get that but what other option do you have? Everyone is wired else but nothing bothers me more financially than the prospect of a cash crunch.

There will be “ what ifs ”. What if my collective fund scheme or the stock runs up right after I vend? Yes, anything can be but occasionally it helps to be rational. Some opinions go right. Some go wrong. You should be fine if your decision-making process is fine( you made the decision after allowing through all the angles). noway judge the quality of decision grounded on the outgrowth.
Besides, there are times when you just feel wedded to an investment. Indeed though the investment has not given good returns( and doesn’t have good prospects either), you just can’t exit for colorful reasons( emotional attachment, can’t bespeak a loss). Plus, no matter how bad the stock/ investment is, it can always rise. All of us have seen similar effects enough times. However, you have a stopgap, If nothing differently. As they say, no way to let a good extremity go to waste. When under the pump due to an EMI increase, use this occasion to suppress your feelings and get relief from similar poisonous investments.

5 Take a Loan with an Easier Prepayment Schedule

Not all loans work on EMIs. There are loans similar to loans against PPF or against insurance programs where the prepayment period is a pellet, or you just have to pay interest until you decide to close the loan.
I understand( and prompt caution when) taking a loan at 10 to compensate for a loan at 7 isn’t a smart decision, but you might consider this option if this reduces pressure on your cashflows. It’s possible, by concluding such an arrangement, your cashflow needs for the short term may go down.

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