{"id":5216,"date":"2023-08-28T15:12:56","date_gmt":"2023-08-28T15:12:56","guid":{"rendered":"\/blog\/?p=5216"},"modified":"2025-12-26T18:34:56","modified_gmt":"2025-12-26T13:04:56","slug":"how-to-repay-home-loan-faster","status":"publish","type":"post","link":"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/how-to-repay-home-loan-faster\/","title":{"rendered":"How to repay a home loan faster?"},"content":{"rendered":"\n

<\/p>\n\n\n\n

Owning a house is a great pride in itself. However, a big portion of the salary going to the bank every month may not be a pleasant feeling for any household. A Home loan<\/a> allows you to live in a house registered in your name, but is that house really yours? All you own is a nameplate hanging outside the main door and photocopies of the sale deed and registration slips. Needless to mention the mental strain associated with the massive EMIs<\/a>. Typically, people take a home loan for a period of 10 to 15 years. Sometimes, to lower the EMI, people increase the loan tenure<\/a> up to 20 – 30 years. However, as these long years pass by, so does your youth. Therefore, the sooner you pay off your home loan<\/a>, the sooner you have a roof of your own in the true sense.<\/p>\n\n\n\n

This blog post helps you learn how to clear a home loan faster and live debt-free in your dream home. <\/p>\n\n\n\n

Make partial payment whenever possible<\/strong><\/h2>\n\n\n\n

Until the last few years, this option was almost avoidable, as you would have ended up paying a huge penalty for prepayment of your loan amount. But now it is possible with the RBI\u2019s monetary policy announcement in June 2012, which directed banks and other financial institutions to waive any sort of penalty associated with the prepayment of loans. <\/p>\n\n\n\n

Thus, you should keep depositing funds in your home loan account in addition to the monthly EMIs. Extra money can come in the form of a festival bonus, arrears, incentives, a gift from relatives on special occasions, the maturity of existing deposits, etc. So, instead of renovating your house<\/a> or buying a new phone or furniture, invest that money towards repaying your home loan account. Initially, this idea might seem troublesome to you, but it will help you save more in the long run.<\/p>\n\n\n\n

Reduce the tenure and not EMI<\/strong><\/h2>\n\n\n\n

After partial payment, the bank will give you the option of either reducing the EMI or the loan tenure. It is not advisable to reduce the EMI, as one should aim to finish the loan as soon as possible. If you want to know how to close a home loan early, keep the EMIs as they are, and you will pay off the loan faster.<\/p>\n\n\n\n

Switch to the bank that offers a lower interest rate than yours<\/strong><\/h2>\n\n\n\n

You should be aware of the latest market trends and home loan interest rates<\/a>. There may be a bank that is offering a significantly lower interest rate than your current lender. Transfer your home loan to that bank after carefully going through their terms and conditions. However, it should be noted that you will again have to pay the processing fee of the new lender. So, your decision should be well researched and carefully thought out.<\/p>\n\n\n\n

Take a look at your savings<\/strong><\/h2>\n\n\n\n

It\u2019s time to ponder over all your savings and investments<\/a>. Savings like PPF, EPF, post office deposits, and some fixed deposits might not give you more interest than what your home loan demands from you. Then, what is the point of keeping such deposits when you are paying more interest to someone else? However, you should always keep a surplus amount for any emergency.<\/p>\n\n\n\n

Consider reworking the EMI structure<\/strong><\/h2>\n\n\n\n

It may seem impossible, but even a slight increase in your EMI might help you clear your loan amount<\/a> sooner than expected. If you simply add Rs. 1,000 more, it will go to your principal account and will help you repay your loan amount faster.<\/p>\n\n\n\n

If you are determined to pay off your home loan faster, you can do it through the careful and planned execution of the above ideas. And don\u2019t forget, you will be the real master of your house only when you have repaid your home loan.<\/p>\n\n\n\n

Why is paying off your home loan early beneficial?<\/strong><\/h2>\n\n\n\n

You\u2019ve read the various ways on how to clear a home loan faster, but it\u2019s also essential to understand the benefits of early home loan repayment. It can help save money and also enhance your overall financial freedom. <\/p>\n\n\n\n

Here are some reasons why you should pay off a home loan early. <\/p>\n\n\n\n

    \n
  1. Lower interest outgo:<\/strong> Early repayment quickly reduces the principal, cutting down the total interest you would have paid over the loan\u2019s entire tenure.<\/li>\n\n\n\n
  2. Faster debt freedom:<\/strong> If you repay your home loan faster, you become debt-free sooner. Thereafter, you can invest your funds, focus on personal goals, or enhance your savings.<\/li>\n\n\n\n
  3. Improved credit profile:<\/strong> Consistent pre-payments reflect strong financial discipline, helping you improve your credit score and future loan eligibility.<\/li>\n\n\n\n
  4. Reduced financial stress:<\/strong> With fewer financial obligations each month, the stress and burden on your pocket are reduced. <\/li>\n<\/ol>\n\n\n\n

    Tips to track and manage your home loan efficiently<\/strong><\/h2>\n\n\n\n

    The following home loan management tips on how to repay a home loan faster are key to your loan repayment journey. <\/p>\n\n\n\n