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Recently many financial institutions have raised their benchmark prime lending rates (PLRs). The PLR is normally a reference or benchmark interest rate that is used by the financial institutions for lending loans. The Reserve Bank of India’s decision to raise the key rates affected many banks as they felt the heat of increased cost of funds. To uphold their profitability, the banks transferred this load to the borrowers seeking home loan.
For borrowers who are tight on the budget will surely be affected by the hiked interest rates. But the market analysts opine that instead of losing the nerve, the borrower should understand and learn to handle his financial standing and debts more proficiently.
BE EQUIPPED
Borrowers who have opted for a floating interest rate should expect fluctuations in rate of interest. Some financial institutions even do not intimate the borrowers about the hike.  Nor do they alert their clients of any approaching rate increase. Save some amount up your sleeve every month which could be used if in case the lender unexpectedly decides to increase the EMIs.
BUY AT INITIAL STAGE
Purchasing a house at initial stage ensures that the buyer will become debt free very soon. Also, paying off the home loan early in life helps to boost other investments sooner.
BORROW AS PER THE REQUIREMENT
Bigger loan amounts take a longer duration of time to be cleared and can turn out to be more challenging. Home loan borrowers who are not able to pay off the EMIs on time might turn into a defaulter and can even lose their dream home.
STAY AWAY FROM MORE LOANS
If you are not able to pay back the home loan installments on time then you should try to find out a better repayment option with the financial institution. Taking more personal loans and credit card purchases will only turn the conditions difficult. Stay away from unnecessary expenditure.
FIND ALTERNATE SOURCES
A loan against security, a gold loan or borrowing money against any property can be an alternate source to generate the much-required funds. You should not bring your emergency or contingency fund to a halt. Find alternate sources or assets that you can sell and prepay your home loan amount as much as possible.
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