What are the benefits of paying home loan EMIs on time?

Posted by Pravansh Mehta on February 3rd, 2021

Home loan EMIs can be challenging to pay concerning the rising property prices. Loan borrowers can reduce the EMI amount by enhancing the loan tenure for as long as 30 years. Still, the amount of EMI against the home loan can be relatively high. Many loan borrowers reduce their unnecessary expenses to pay the EMI on their loan and make fair use of their income.

The timely payment of home loan EMIs can help loan borrowers grab attractive deals on balance transfer, top-up loan offers, and boost their credit score. They can also pay off their dues and home loan interest rates without running into debts. They can get the perfect credit score between 300 and 900, based on their repayment. They can keep paying their loans on time until the score is 750 for additional benefits.

Since timely repayment leads to a good credit score, it further translates into attractive balance transfer deals. A balance transfer is a process to transfer the existing home loan to another lender at a lower home loan interest rate. Loan applicants can either continue with the same EMI or opt for a reduced EMI after the balance transfer. In either case, they save on interest payments.

The savings increase if they continue with the same EMI. The tenure will also reduce along with the interest payment of the home loan. It becomes easier for loan borrowers to get rid of the loan and debts. Many banks also offer attractive top-up home loan deals if they receive the EMIs on time.

An additional amount over the outstanding loan balance is known as a top-up home loan. Whenever individuals require funds for marriage, travel, medical emergency or any other personal purposes, they can apply for a top-up on their home loan, instead of going for a full-fledged personal loan. The home loan rate of interest is lower than a top-up loan and personal loan. The interest rate of a top-up home loan is more than that of a regular home loan.

In some banks, the top-up amount adds to the outstanding home loan balance when the rate remains the same. Accordingly, the lender will calculate the EMI at the regular home loans interest rates. So, the top-up amount will run for the time left for the traditional home loan. In case the consolidated EMI becomes too much for the borrower to pay on time, the lender can increase the tenure of both loans.

Customers who have a spotless loan payment record get credit cards from lenders. They have high credit limits, extensive rewards, cashback offers, and much more for online and offline shopping.