You have bought a new home and have taken a loan on it. You pay an EMI which in the initial years comprises mostly of the interest. Now remember, interest is an expense that you’ll bear every month till the end of the loan tenure. So it is very important for you to save on your home loan.

Here are some tips to help you save on the home loan.

• Opt for a floating rate home loan. Usually floating rate home loans are cheaper than fixed rate loans.
• Use the loan comparison websites. There are many loan comparison websites that compare the loan offerings from various lenders. Go through these offerings and select the lenders offering the lowest possible interest rates on the loan.
• Read the terms of loan carefully. Does the loan prohibit you from prepaying it? Will you have to pay prepayment penalty to change the lender or to speed up the loan tenure? Does your lender offer you the latest terms that it offers to its new customers?
• If there is no prepayment penalty, try to prepay the loan whenever you have some extra cash. This will reduce the loan tenure and free you from loan quickly.
• Check out the processing fee, insurance charges and other expenses. All these expenses add up and increase the cost of loan.
• If there is no prepayment penalty, try to change the lender. This is because with stiff competition in home loan market, lenders keep on offering innovative products that can ultimately save you money.
• Try to take the smallest possible loan amount. This is because smaller the amount lesser the interest you end up paying.

Your company has just awarded you the Diwali bonus. You want to use the money to buy the latest mobile phone. But is it the right way to spend your bonus? Is there any other way to make the best use of this surplus cash?

Well, there are actually some things you can do with the money that will help your finances in the long run.

• Clear off any pending debts: Do you have any credit card debt? Have you taken any personal loan? If yes, then use this money to repay any such debts. It will save you a lot of money in terms of interest.
• Build a corpus for retirement: Retirement is one of the most stages in a person’s life. Many people don’t pay serious attention to building corpus for retirement. But when they retire they find out that they don’t have sufficient funds to meet their expenses. So it is very important for you to start building your retirement corpus from the time you start working. Use your bonus to build the retirement corpus.
• Buy additional insurance: Do you know insurance is very important for you and your family? You should have both medical as well as life insurance. Use the excess cash to buy both these insurance.

These are some of the best ways in which you can use your bonus money.