5 Home Loan Repayment Tips You Should Know

home loan repayment tips

While you are paying Home Loan EMI or planning to buy new house on Home Loan, it is very important to know some Home Loan Repayment Tips so that you can close your home loan before time instead of paying EMI for long term in your life. Imagine how great you would feel if you close your home loan before time and enjoy the rest of your life stress-free without having to necessarily work to pay the home loan EMIs.

Let us understand 5 Home Loan Repayment Tips in detail:

1. Make Home Loan Prepayments

Home Loan Prepayments is a way to reduce the remaining principal balance on your home loan. The idea is to accumulate some amount while you are paying EMI every month, and once required amount is accumulated (at least 2-3 months of your EMI amount), you deposit this amount to your bank or financial institution from where you have taken home loan.

This amount will than be reduced from your principal balance remaining in your home loan, thus reducing the interest amount you have to pay in your loan EMI. It also helps to close your loan before time if you choose to reduce tenure.

While making prepayments, you have 2 options:

  1. Reduce Loan Tenure or
  2. Reduce Loan EMI

It is better to reduce loan tenure to save maximum interest on your home loan and also to close your loan before time.

Watch below video to understand more about Home loan Prepayments:

Home Loan Prepayment Video

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2. Keep Loan Interest Rate Low

While opting for home loan to buy your dream house, it is very important that you check the interest rates on home loan in all possible banks and financial institutions. Since you will be paying home loan EMIs for coming many years of your life, due diligence must be done from your side to save maximum of the interest amount on loan.

Home Loan interest rate plays a crucial role in knowing how much total interest you will have to pay throughout the loan tenure.

For example, on home loan of Rs. 30,00,000 for 10 years, below are the loan EMI of various loan interest rates:

  • Total Interest Paid at Interest Rate of 9.5%: Rs. 16,58,312
  • Total Interest Paid at Interest Rate of 9.0%: Rs. 15,60,328
  • Total Interest Paid at Interest Rate of 8.5%: Rs. 14,63,485
  • Total Interest Paid at Interest Rate of 8.0%: Rs. 13,67,793

As seen above, lower the interest rate, total interest to be paid by you on your home loan throughout the tenure will be less, and this is how the interest amount can be saved by you in long term on your home loan.

Use Home Loan EMI Calculator here:

instant calculator click here
instant calculator click here

3. Keep Loan Tenure Low

Similar to interest rate, the lower the tenure, less interest amount will have to be paid by you throughout the loan tenure.

Let us take the same example as above of Rs. 30,00,000 loan at 9% interest rate. Below is the total interest to be paid on different loan tenure:

  • Total Interest Paid with 15 Years Tenure: Rs. 24,77,040
  • Total Interest Paid with 12 Years Tenure: Rs. 19,16,293
  • Total Interest Paid with 10 Years Tenure: Rs. 15,60,328

So as seen above, the total interest amount to be paid decreases with the decrease in loan tenure. Please make note that the EMI amount will increase with the decrease in loan tenure so you have to set the loan tenure accordingly to afford the monthly Loan EMI to be paid.

4. Never miss Loan EMI Payments

Loan EMI need to be paid every month and you should never miss any home loan EMI for the due date.

Make sure you have sufficient balance in your bank account for auto debit of the loan amount, so that you don’t have to pay any penalties on late EMI payments.

5. Tax Benefits on Home Loan

You get Tax Benefits on your Home Loan under Section 80C and Section 24(b). Below are the tax deduction limits for FY 2023-24 with Old Tax Regime:

  • Section 80C: Rs. 1,50,000
  • Section 24(B): Rs. 2,00,000

Based on Section 80C, you get tax deduction on the principal portion of your loan EMI. Where as based on Section 24(b), you are eligible to claim up to Rs. 2,00,000 as interest amount in home loan EMI in financial year.

Please note that these deductions are available in old tax regime. New tax regime have less number of deductions to be claimed.


So these are some of the Home Loan Repayment tips that you should know. Below is the summary:

  • Make Home Loan Prepayments
  • Keep Interest Rate Low
  • Keep Home Loan Tenure Low
  • Never Miss EMI Payments
  • Tax Benefits on Home Loan EMI Payments

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