Housing finance facilitates ownership of your dream home. That’s all most people want to know about home loans in India . But, that is just the tip of the iceberg. Home loans are like a marriage. Whatever amount is spent on wedding, it is the marriage that matters. You can go searching high and low for the best home loan in India or grab the first offer you receive. You need to repay home loan EMIs consistently. That’s the most important factor for a borrower as well as a lender. In entire home loan process, home loan eligibility criteria may seem important. But, it boils down to EMI once you sign on the dotted line.

So, let’s simplify housing loan repayments for you. When you are making monthly home loan repayments, you need a three-side strategy to protect your asset – your dream home. The three sides are:

EMI:

Housing loan EMI is at the crux of entire repayment strategy. You need to finalise an EMI you can afford. What does that mean? A young and single guy can afford even a 50% of monthly income as EMI. But, a married couple may have higher expenses. Therefore, borrower must ensure that EMI is lower than 30% of active monthly income through the house loan tenure. That is easier said than done. However, it is a worthwhile thought process for every house loan borrower.

Saving:

There are several repayments options for housing finance in India. They allow you to start big or start small and adjust the rest of the funds accordingly. But, either way, there is a risk. You need to save enough every month. Can you save a sufficient amount every month with non-contingencies such as utility bills, taxes, and insurance premiums? Ensure that your monthly savings allow you to repay EMI without any fiscal issues. It is one of the reasons why it is best to have a housing loan EMI lower than 30% of monthly income. A survey shows that most Indians can save 30% of their income comfortably.

Backup plan:

Are you prepared for contingencies? When you consider a housing finance in India, most people fail to take it into account. E.g.: In spite of health insurance premiums, most people need to pay several expenses during a medical emergency. If you do not have a backup plan for house loan EMI, you will get further trapped during one of these crisis situations. Therefore, you need a backup plan that allows you to save up for a rainy day. Save it in a liquid asset like a fixed deposit so that you can use it as and when required.

So, plan ahead for all the housing finance related possibilities. Then you will fair through all the financial and non-financial challenges easily.