Smart Financial Planning: Managing 30 Lakh Home Loan EMIs with Less CTC

Home Loan is among the most popular funding options for purchasing their dream homes. With a small down payment, you can avail a financial aid to pay up to 90% of the property’s cost and become a proud homeowner. However, the real challenge pops up when it comes to EMI repayments. If you have obtained a Home Loan of Rs 30 Lakh but have less CTC, here are some smart financial planning tips to promptly pay off the 30 Lakh Home Loan EMI.

What is CTC?

If you are a salaried employee, you must already know the CTC  meaning. It is your cost to the company that your employer spends on you for hiring your services and skills. You can calculate your CTC by adding the direct and indirect benefits to your gross salary.

Importance of CTC

CTC is the total benefit you receive from the company. However, you only keep some of these benefits. Some are periodic, while others are accessible only under certain circumstances. So, Home Loan providers are more concerned about your net income than your CTC. Simultaneously, a high CTC indicates a high net income, improving your Home Loan eligibility. Moreover, loan companies check your current financial obligations to evaluate repayment capacity. They expect a lower debt-to-income ratio to ensure timely repayment without causing a financial crunch.

Tips to Manage 30 Lakh Home Loan EMI with Less CTC

If you have a lower CTC, here are a few tips to manage your 30 Lakh Home Loan EMI:

• Choose Your Loan Plan Carefully: Various lenders offer Several Home Loan plans. Selecting one that best suits your affordability becomes difficult, especially if you have a low CTC. So, it is better to research well before choosing the right loan plan. Before finalising, compare their interest rates, repayment tenures, and other terms and conditions.
• Manage Your Income: Lenders often expect a consistent income source to ensure you repay your EMIs promptly. They will ask for proof of income to determine your affordability. They will also want to see your bank statements for financial obligations and income consistency. Mention all income sources in the loan application form and supplement earnings with a part-time or freelance job to boost your EMI affordability. Doing that will ensure timely and convenient repayment, building the lender’s trust in you.
• Prioritise and Set an Automatic Payment Schedule: Avoid late payments or missing EMIs as much as possible. Late payment penalties will increase your loan burden and make repayment more challenging. You may also set an automatic payment schedule to pay your EMIs automatically without manual effort. Afterwards, your EMIs will be automatically paid to the lender from your bank account each month before the due date.
• Consider Prepayment: Since your CTC is bound to increase each year according to the employer’s policy, consider revising your 30 Lakh Home Loan EMI with an increase in income. This way, you can repay your loan much faster, reducing your liabilities in the long run. You can also prepay the loan using any extra amount or savings you build during the loan term. However, check the lender’s applicable charges before deciding about prepayment. Use a Home Loan prepayment calculator to make a better decision.
• Choose an Appropriate Repayment Tenure: Loan companies offer loan terms of up to 20 years. You can finalise a tenure according to the EMIs you can afford each month within your limited CTC. A Home Loan EMI calculator helps calculate the EMIs for various loan terms, letting you determine the most appropriate repayment tenure for your loan repayment. Enter your loan amount, interest rate, and tenure to calculate the payable EMI. You can change the variables according to your repayment capacity.
• Consider Home Loan Transfer: If you borrowed a Home Loan earlier at a higher interest rate, you can transfer the outstanding balance to a new lender offering a lower Home Loan interest rate. The switch is quick and seamless at nominal transfer charges.

These tips will help you master the art of efficient financial management and successfully manage your 30 Lakh Home Loan EMI. Use an EMI calculator to make informed decisions and solid repayment plans to get out of debt as soon as possible.

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