How to Pay off Home Loan Faster
Getting the possession of your dream home feels like a festival. Everyone wishes to get fast possession of home. But how to do it ? So, here we have some great strategies which will help you to pay off your home loan faster and get rid of debt and reduce financial burden.
Follow these tips to pay off home loan faster and save lakhs of interest
Make a down payment that exceeds 20%
– For a smoother loan repayment, you should make a down payment of at least 20% to 25% or more if you have the financial means. It will significantly reduce your principal loan amount and ultimately lower your interest and EMI burden.
Make a part pre-payment
– The lenders do not charge for a certain amount of part-payment on home loans with a floating interest rate. Through part-paying, you can drastically reduce your home loan
Pay Higher EMI
– Even a small increase in the EMI can significantly reduce your loan tenure. This is a common way of repaying the home loan faster, especially with salaried individuals.
– Although a home loan is an expensive affair, it comes with several tax benefits that can help you save a considerable amount of money every year. You can claim a tax deduction of up to Rs 2,00,000 in a financial year for home loan interest payment under Section 24 of the Income Tax Act,
One Extra EMI every year
– You can also pay one more EMI (than the usual number of EMIs) every year. This is an effective trick to reduce your loan tenure, and in turn the interest cost.
Choose a lower interest rate
– Make sure to research the market and find lenders with lower interest rates.
– This involves making payments on top of your regular repayments, which will go towards paying off the principal of your loan.
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