Repaying a home loan is a long and expensive commitment, and keeping track of your home loan can help you spot hidden charges, accomplish the loan’s timely repayment, and save money in the long run. Here are some actions that can help you stay on top of your home loan with ease.
Visit your online loan portal
When your loan is disbursed, the bank gives you access to the home loan portal. This portal comes with a number of tools that help you track your EMI repayment, know about the existing and past interest rates levied on the loan, outstanding amount, and other details related to your home loan. Each time there are any revisions to your loan—be it the interest rate or the terms and conditions—it is reflected here.
Check your loan statement
The loan account allows you to access a statement of accounts which contains the details of the loan from the time it started. Checking the statement regularly helps track what you have already paid and what is outstanding. You will know whether your EMIs are getting credited to your loan account on time. A home loan statement is useful when claiming the tax deduction benefit under Section 80C or Section 24.
Read the credit report
There are instances when the lender reports wrong information to the credit bureau, which can negatively impact your credit score. Checking credit reports regularly can help you take corrective action in case there’s any discrepancy or mismatch in the information reported to the bureaus.
Check the amortisation schedule
Adhil Shetty, CEO, Bankbazaar.com, says, A little escalation in the interest rate can make a huge difference in your overall repayment obligation.” So, it’s crucial to keep track of the interest rate charged and understand the impact of the change in interest rates on the cost of the loan. Similar to the loan statement, the amortisation schedule shows the previous interest rates and payments. It also shows the number of outstanding EMIs after the rate change and a detailed split of the principal and interest components in the EMI.
Loan agreement terms
When the interest rate increases, borrowers may choose a longer tenure or increase their EMIs. If the borrowers don’t approach the lender with a preference, the bank follows the default option as per the terms and conditions mentioned in the loan agreement. Typically, this is an extension of tenor as opposed to an increase in EMIs. You should read the loan agreement carefully to keep close track of your home loan.