Home Loan: With no change in the repo rate of the Reserve Bank of India (RBI), waiting for a reduction in home loan interest rates may prove to be disappointing. Recently, RBI Governor Shaktikanta Das also indicated that there is little hope of a cut in the repo rate in the near future.
In such a situation, instead of waiting for the interest rates to come down, it may be better to plan to prepay the home loan and finish it as soon as possible. Here we are telling you four ways to prepay your home loan so you can finish it quickly.
How long interest rates will go down depends entirely on the economic conditions and the central bank’s policies. If you want to get rid of the home loan quickly, then these methods of prepayment can help you:
1. Lump sum prepayment: Reduce the loan amount by paying a lump sum amount. This will also reduce the interest.
2. Paying additional EMI: Pay additional EMI from time to time. This will reduce the loan period.
3. Prepay when interest rates are low: If interest rates are low, use your savings to make prepayments.
4. Take a new loan and repay the old one. If you get a better interest rate, repay the old loan with the new loan.
Here are some other ways to get rid of a home loan
1. Budget: Make a strict budget for your expenses so that you can save more money for the loan.
2. Use additional income: If you have any extra income, such as a bonus or tax refund, use it for prepayment.
3. Reduce loan tenure: If possible, consider reducing the loan tenure. This may increase your EMI, but the overall interest will be lower.
4. Switch from fixed to floating rate: If you have a fixed rate loan, switching to a floating rate loan can be beneficial, especially when interest rates are falling in the market.
5. Refinancing: Pay off your old loan by taking a loan from another bank or financial institution at a better interest rate.
With these measures, you can reduce the burden of your home loan and repay it quickly.
