Home loans are often the most significant financial commitments individuals make, stretching across decades. Early repayment can offer substantial financial freedom, reduce stress, and save on interest, allowing homeowners to allocate resources to other investments or savings.

However, it’s essential to weigh the benefits of early repayment against the potential returns from investing in avenues that might offer higher yields than the interest rate of the home loan. Given that home loans generally have lower interest rates compared to other types of loans, it might sometimes make sense to invest surplus funds rather than accelerate loan repayment.

If early repayment fits into your financial goals, here are five practical strategies to consider:

Lump-Sum Repayments with Bonuses

Utilising annual bonuses, tax refunds, or other lump-sum payments to reduce your principal can significantly decrease the interest burden and shorten your loan’s tenure. Even allocating a portion of unexpected windfalls towards your home loan can make a substantial difference over time.

Also read : https://1finance.co.in/blog/how-to-restructure-your-loan-understating-loan-restructuring

Incrementally Increase EMIs

As your financial situation improves—perhaps through a raise in salary or decreased expenses—gradually increasing your EMI payments can be an effective strategy. This approach allows you to pay off the loan faster without dramatically impacting your monthly budget.