Are you Tired of your Loan Repayment Burden? Learn How You Can Pay it Sooner Than It Is Due Dec 12, 2018 | Home Loan Are you still thinking of brushing the long borrowed loan off your shoulders? Repaying a loan sooner than it is due is always a good idea. Timely repayments build a better image for you as a borrower, helps you maintain a good credit score thereby increasing the chances of your loan approval in the future. Living a debt-free lifestyle where you own your home outright is the direct path to peace and satisfaction. To help you achieve this, Your Finance Adviser tells you how you can repay your home loan sooner than it is due. Align your mortgage repayments with your income- To avoid failure of repayments of your loan; you must keep a schedule of your repayments in accordance to your income. You may think of making your loan repayments fortnightly or ‘bi-monthly’. This would help you make one month’s extra repayment each year without creating much impact on your pocket. You may reap the benefit of online tools like home loan calculator to get an estimate of how much interest you would be required to pay. Consider a Home Loan offset account- A home loan offset account is a savings or transaction account attached to your home loans Australia. Instead of paying separate and taxable interest on your savings, the value of cash in your offset account is deducted from your home loan balance with the interest calculated on the difference. Creating an offset account is like creating a separate savings account. Think of Refinancing your Home Loan- Review your home loan and make sure that it fits your needs. If it doesn’t, consider refinancing your home loan. You may renegotiate your current rate with your existing lender or moving to a new lender that offers the best home loan rates, thereby resulting in savings and reducing the term of your principal and interest on the loan amount. Pay off the principal- Depending on your financial situation, you may want to stay clear of interest only loans. Choosing to only pay the interest on your loan for a set period of time implies that the required principal amount should be paid off at a higher propensity once the interest-only period expires. Be aware of your entitlements- As a borrower, you are entitled discounts and special conditions if you are from a specific profession. For instance, if you are a certified medical professional or a chartered accountant/CPA, then some lenders may waive the Lender’s Mortgage Insurance (LMI) or lend at a higher loan to value ration before charging LMI. This will give you a significant head start on paying off your loan. Go beyond the brands- It is not necessary to borrow only from the big banks. You may rather switch over to small lenders as they are sometimes backed by larger banks. Even in such a case, small lenders would always compete harder for your business; they will also give you an idea of the interest that you will have to pay using tools like home loan calculator, etc. Small lenders may also offer you benefits like longer-term loans, lower ongoing fees, and lower interest rates which the big banks won’t. Switch loan types- While looking for a home loan, you may get an option of choosing from a variety of home loan types offered by banks and lenders. Some of which carry a higher interest rate than the others while the others have higher discounts available on them. The others might have additional features and products as well. You may take advantage of the availability of such facilities, and benefit from reduced interest rate, reduced monthly repayment and save a huge amount over the loan term. To gain assistance in borrowing home loans Australia at best home loan rates, or repaying the loan sooner than it is due, you may get in touch with the lending specialists from Your Finance Adviser. Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.