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Expenses Vs Emi – How To Budget Sensibly

By Author: Aishwarya Mahurkar
Total Articles: 291

Home loans are extremely beneficial as they help one purchase their dream home. However, the EMI payments each month can put a strain on the borrower’s finances. It is for this reason why banks always attempt to issue loans which are affordable for the applicant. The loan they issue will never charge more than 40 percent of the borrower’s salary each month. As a borrower however, it is extremely important for them to plan their finances and expenditure in advance to help them meet their EMI requirements. It is for this very purpose that a housing loan EMI calculator is provided by banks to their customers. This calculator takes into account an applicant’s loan amount, the interest payable and the tenure of the loan. Using these figures the housing loan EMI calculator will find out how much EMI an applicanthas to pay each month.

It is vital that a borrower manage to plan and budget his finances wisely to prevent any defaults in payments from occurring.

• The first thing a borrower must do is conduct a detailed analysis of his monthly income and expenditures. Through this, he will have a proper understanding of how much of his income is spent for what purpose each month.

• Secondly, with this knowledge in hand, he can start planning to cut down on unnecessary expenses. If one spends a large amount of their money on eating outside, they can look at more affordable options such as eating at home and reducing the number of times one goes out to eat. With the help of a housing loan EMI calculator he should have an idea as to how much expenditure he should reduce.


• A borrower should also create separate accounts for his loan repayment and savings. When you route all your monthly expenditure from one savings account, it becomes extremely difficult for one to keep track of the money spent.

• The next thing all borrowers must do is create a contingency fund. This fund will help the borrower to repay the EMI on months where they are short of money. Failure to meet EMI payments can severely affect one’s credit score and hence must be avoided at all costs. A borrower should start putting money away in a contingency fund eve before they apply for the loan. A contingency fund should have enough money to repay three EMIs in a row.


• Any excess savings of the borrower can be used to invest in mutual funds which will provide good returns over a long period of time. These returns can also help one repay their loan in advance before the tenure ends.

As long as a borrower does not over spend on unnecessary items and keeps a balance between his income, expenditure and EMI repayment, he should not face any defaults during the tenure of the home loan.

Author Bio :

The author is a seasoned writer on finance topics and through her writing; she articulates aspects of home loan that are important to people availing the home loan facility. She writes about a variety of topics covering the home loan documents, rates, housing loan EMI calculator that help to make the best decision.

Total Views: 97Word Count: 526See All articles From Author

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