How do I improve my home loan repayment? When to prepay a home loan?

1. How do I improve my home loan repayment? When to prepay a home loan? October 09, 2021 Generally, people take home loans for tenure of 20 years or more. It is a long-term contract between you and the lending institution. Many times, you want to prepay the home loan. If you also want to repay the home loan before the stipulated period, then you should make a decision about it only after considering many things. Let us know what these things are. 1. Which loan to repay first?

2. If you have money coming from any source then you can think of eliminating a personal loan or car loan. You get exemption from tax rules on the continuation of the home loan. Along with this, you pay less interest in a home loan as compared to any other loan. For this reason, you should think about paying for it last. If you have money left over even after all the necessary investments and retirement planning, then you can consider prepayment of a home loan. 2. When should one prepay the home loan? If the interest rates on your home loan are hiked midway, then you must consider prepayment of the home loan. This is because once the interest rates increase, your monthly instalment amount does not change, your home loan tenure will increase. Prepayment at this time will give you relief from the increased interest rates. However, it should also be kept in mind that the housing loan institution should not levy any penalty on your prepayment. Recently, banking regulator RBI has asked banks not to charge any prepayment penalty if a customer wants to prepay a home loan. 3. Prepay sooner or later? If you make prepayments in the first 10 years of taking a home loan, keep in mind that being young, a home loan is saving you a lot of money in the form of income tax liability on your earnings at the moment. You get income tax exemption on the amount up to Rs 3 lakh per annum as the principal and interest of the housing loan. In the later years of the home loan, you pay most of your EMI as principal. At this time the share of interest decreases. However, on this interest, you can also get relief in income tax at this time. Along with this, you should also keep in mind that if you have paid a lot of interest in the initial years of the home loan, then you are paying

3. most of the principal amount in the subsequent years, so prepayment is not a wise decision. 4. Why prepay for a home loan? The sole purpose of prepaying the home loan is to save the amount you have to pay as interest. This reduces the total value of your home loan. However, you can also claim an exemption under section 80C of the Income Tax Act on the amount paid as a prepayment of a home loan. You also need to keep in mind whether prepayment of a home loan is a win-win deal for you. You will also get income tax relief by continuing with the home loan and on the same amount, you will earn better returns as compared to the interest paid on the home loan. Apply for subh vyapari loan calculate housing loan emi home loan housing loans loan against property Loan for business pradhan mantri awas yojana