Tips to Clear Your Home Loan Faster

When you pay off your mortgage on time, you reduce your risk of falling into a debt trap and protect your credit rating. Making your monthly mortgage payments (EMIs) is a long-term commitment that might last anywhere from ten to thirty years. Let's take a look at some strategies for paying off your house loan more quickly:

Ways To Payback Your Home Loan Faster

Make Maximum Down Payment

A large down payment is preferable as it will considerably cut your main loan amount and subsequently lower your interest and EMI burden. A down payment of 20% to 25%, or more, will make it easier to manage your monthly mortgage payments.

Pick the Lender with the Best Rate of Interest

While numerous banks and housing finance companies provide a house loan, it is vital to conduct your research, compare different lenders, and choose the correct lender that gives the better value at low interest. When the interest rate is lower, you can repay your debt faster. Consider a home loan balance transfer to a new mortgage with a lower interest rate if you already have a high-interest mortgage.

Consider Additional Fees

It's important to factor in processing costs, late payment charges, and other hidden expenses when deciding on a lender. Avoid late fees by paying your EMIs on time. Also, your credit score may suffer from your overdue payments, which might result in the denial of future loan applications.

Increase Your Monthly Instalment

If you get a raise or have disposable income, you can negotiate with your lender to shorten the loan term and increase your monthly payment. This strategy is often used to repay a mortgage sooner. Changes in the EMI can affect the length of time it takes to pay off a loan. In addition, the interest you pay will be less if you have a shorter loan term.

Tax Benefit

A house loan is a significant financial commitment, but several tax breaks may help you save a significant amount of money annually. Under Section 24 of the Income Tax Act, 1961, you can deduct the interest you pay on a house loan from your taxable income up to a maximum of Rs 2,00,000 every financial year. Those with higher income tax rates will gain the most.

If the property's worth is less than Rs. 4,50,00,000, you can deduct up to Rs. 50,000 under Section 80EE of the Income Tax Act, 1961, and up to Rs.15,00,000 annually under Section 80C.

Take Advantage of the Falling Interest Rate

The loan interest rates often decrease if the Reserve Bank of India (RBI) reduces the repo rate. Two options are available in this case: lower the EMI or shorten the loan term. It would help if you shortened the duration of your loan while keeping the same monthly payment.

=> Read Also:- Different types of Home Loan in India

Increase rental income

You may want to consider renting out a part of your home, depending on how you intend to utilise it. This will increase your side income and will also assist you in avoiding delaying your monthly EMI payments. If you have purchased a multi-storey home, you can always rent some of the floors to make extra money.

If you want to pay off your mortgage faster, try some simple strategies outlined in this article. Shortening the length of your mortgage repayment period can help you save for retirement, take a much-needed vacation, etc. Also, it's a great relief to finally put an end to your debt and enjoy the p sychological and financial benefits of getting a huge weight off your shoulders.