A down payment is a lumpsum amount paid when you’re taking something on loan or credit, like a home loan. It is a key step in the process of buying a new home. But since this is a large amount, there is a need to save up to be able to pay it. The minimum down payment across NBFC’s and banks across India is about 20% of the value of the property. Below are some ways to save up so it becomes easier for you to pay such a substantial amount.
Save every month
Saving up must become a habit if you are planning on availing a home loan. Budgeting your monthly expenses to as to save up enough to repay the home loan amount is what you need to work out. What’s important is inculcating this as a routine practice so that you don’t overshoot your budget, especially during your home loan repayment tenure.
Calculate your repayment tenure
Finalize the home loan amount you want to borrow, work out the down payment amount and then calculate how much time you’d take to repay the remaining amount. This is simple when you have a plan in place and creates discipline in saving.
Choose a high-interest savings account
Don’t put your money in an account that does not give you any returns. Keep it in an account that gives a return so your savings can multiply, like a PPF for example.
Invest in Mutual Funds and ULIPs
Mutual funds are a good way to amass wealth. They are relatively risk-free (depending on the fund you choose) and provide excellent returns if invested strategically. The additional money earned will assist you in paying the Home Loan down payment.