How To Repay Home Loan Faster and Close it Early?

How To Repay Home Loan Faster and Close it Early?

When someone buys a new home, it is very likely that they have saved enough money over the years to make an upfront payment. But it is also understandable that such a large sum of money may not be readily available to everyone at any point in time. This is where home loans can be important.

Note that the home loan interest rates in metropolitan cities like Mumbai, Delhi, and Bangalore tend to be higher. If one chooses a property in a well-connected and amenity-rich location, the property could be expensive, which means the home loan amount will also be higher.

The home loan amount can also depend on the buyer’s credit score. For instance, getting a home loan approved will hardly be an effort if the buyer has availed of any credit before and repaid it on time. This results in a high credit score, which leads to better creditworthiness, which lenders will consider before making a loan offer.

If someone is planning to take a home loan or already has one, here is how one can complete the repayment of the home loan easily with this home loan guide.

Here are 5 Home Loan Repayment Tips

Avoid missing EMI payments

One of the most important home loan tips would be to avoid defaulting on EMIs (Equated Monthly Instalments). The delay or default will result in a 2% penalty on the interest rate as well as any applicable taxes. Additionally, the EMI amount will increase, and the CIBIL score or creditworthiness will drop. The latter can create issues if one needs to apply for any loans in the future.

One can set a reminder or an auto-debit facility so that EMIs are automatically deducted, and one does not have to worry about missing the due date each month.

Go for low-interest rates

Choose a lender that offers low-interest rates on home loans, allowing the buyers to pay manageable EMIs. High home loan interest rates can make the EMIs expensive, especially if the principal amount is greater, but selecting a lender with low-interest rates can help.

Arrange for prepayment of your home loan

To opt for a prepayment of the home loan, one will need to ensure that they have sufficient funds so that their other expenses are not disturbed. Prepaying the home loan reduces the principal amount of the loan and the number of EMIs in the loan schedule. This is the first step one can take if they have been wondering how to close their home loan early.

When someone avails of a home loan, their bank will open a current account from which they can withdraw and deposit money at will. By linking this current account to the bank account, the total amount in both accounts is reduced, reducing the interest burden. This will reduce the interest liability of the home loan.

Since there is no restriction on the withdrawal or deposit of funds on this current account, one can transfer money from their savings bank account to ensure that there is no dearth of funds when it is time to pay the EMI instalment. Also, the home loan will only be calculated as per the outstanding loan amount and not the balance in the current account.

Choose a short home loan tenure

Choosing a short home loan term allows a buyer to close the loan quickly. The good thing is that home loan repayment tenures are quite flexible and can be as long as 30 years. However, by stretching it to 30 years, the interest amount will also be greater.

Moreover, a shorter tenure will allow one to take another loan once the previous loan is repaid, which can help the credit score and increase creditworthiness.


With these simple guidelines, repaying a home loan can be a piece of cake. Many homebuyers also choose a home loan amount that is slightly lower than their credit limit or eligibility, so that when interest rates are considered, all their EMIs do not exceed the total home loan amount they intend to obtain.

If someone is considering buying an apartment, they should consider Piramal Realty. Piramal Realty’s residential projects will provide home buyers with fixed-interest home loans at 6.75% per annum until 2024 in the ongoing campaign. This is applicable to all Piramal Realty residential projects across the Mumbai Metropolitan Region (MMR).

*Disclaimer- This article is based on the information publicly available for general use as well as reference links mentioned herein. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim/disown any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.

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