5 Tips to pay off a house loan debt quickly

Although it takes a lot of effort to pay an installment for a house, if you know how to manage your debt, it will not be difficult.

1. Pay in excess of every installment
   Remember that the monthly installments you pay to the bank are principal and interest. The bank will inform you from the beginning of the loan agreement how much installment payment will be paid per month. So if you’re overpaying for your house installment, the excess amount of money will be used to deduct your principal which means that your interest rate will be lower, and it will help you completely pay off your house loan debt quickly. For example, you can buy a house at 2 million baht with 7% interest per annum for 30 years and monthly installments of 10,000 baht. You may choose to increase your monthly installment to 20,000 baht, which will reduce your debt to 9-10 years. The lower the principal is, the lower the interest is.
   
2. Quickly pay off a house loan if you have a lump sum of money
   The longer it takes us to repay our house installments, the more expensive interest will be paid. If we have a lump sum of money, we should pay for our house installments. This will help reduce unnecessary interest burdens.
   
3. Try to pay as much as you can during the low interest rate period
   

   House loan interest rates are usually the lowest during the first three years of the bank’s terms, which is the best time to pay as much money as possible to reduce principal and interest each installment. Maybe you can try paying more in each installments. For example, a home loan is worth 2 million baht and an installment is 14,000 baht per installment. During the low-interest rate period, you should pay additional installments of 16,000 baht. Thus, the total installment you have paid is 30,000 baht. The bank calculated the interest to be 300 baht per day which will be calculated 5 days after the payment date. Therefore, the installment amount of 30,000 baht will deduct the interest of 1,500 Baht and the principal of 28,500 baht.

4. Refinance oor Retention
   

   The house interest model is an MRR that usually increases the interest rate in the following years such as a 3% interest rate in the first 3 years but the interest rate is adjusted to be 6.5% in the 4th year. It will become more difficult to reduce the principal. Debt restructuring is an alternative for interest rate adjustment in two ways:

   • Refinance is to move the existing debt to a new bank for low-interest rate installments, like the first three years of installment, to reduce the principal and pay off debt faster.
   • Retention is the same as refinancing but is a reduction in interest rates from existing banks that have applied for loans. The applicant must have a good credit history.
5. Check the company’s privileges or your career’s

   Check if there’s a special offer from the company that you’re working with, because maybe there’s an employee package, or if you have a special career like the medical profession, judges, commercial medical pilots, nurses, or civil servants. These occupational groups are often given special privileges, such as interest rates or special offers from banks that may help shorten the grace period or save more than ever.