Reduce Home Loan Tenure and Save Big with Part-Prepayments

Owning a home is a cherished dream for most of us, but the long journey of repaying a home loan can sometimes feel overwhelming. What if you could achieve financial freedom sooner by reducing your home loan tenure? With part-prepayments, you can significantly shorten your loan tenure and save on interest.

Let us explore how part-prepayments work, how you can maximise their benefits, and why tools like the home loan prepayment calculator and home loan EMI calculator can make a huge difference.

Why you shouldn’t ignore part-prepayments?

Imagine paying off your home loan several years ahead of schedule. Sounds great, right? Part-prepayments make this possible. By reducing your principal amount, these payments lower the interest you owe and shorten your loan tenure.

Let us say you have a Rs. 40 lakh loan at 8.5% interest for 20 years. A one-time prepayment of Rs. 3 lakh after 3 years could save you lakhs in interest and reduce your tenure by over a year.

Benefits of part-prepayments

Here is why part-prepayments are a smart financial move:

1. Save lakhs on interest: Reducing your principal means paying less interest over time. Imagine saving a significant chunk of your earnings that would otherwise go toward interest payments.
2. Achieve financial freedom sooner: Shortening your loan tenure helps you get rid of debt faster, giving you peace of mind and the ability to focus on other financial goals.
3. Improve your credit score: Making prepayments demonstrates financial discipline, positively impacting your credit score and improving your eligibility for future credit needs.
4. Flexible payment options: Whether it is a festival bonus, annual raise, or tax refund, part prepayments let you use these funds effectively without disrupting your finances.

Follow these steps to make the most of part-prepayments and reduce your home loan tenure:

1. Analyse your finances: Before making prepayments, assess your financial health. Ensure you have sufficient funds for emergencies while allocating any surplus—like bonuses or windfall gains—for prepayment.
2. Use the right calculators: The home loan prepayment calculator is your best ally in estimating the impact of prepayments on your loan. Similarly, the home loan EMI calculator helps you understand how reduced tenure or EMIs can fit into your budget.
3. Check prepayment terms: Some lenders may charge a small fee for part-prepayments. It is essential to review your loan agreement or speak with your lender to ensure you are aware of any terms or conditions.
4. Set a prepayment strategy: Instead of waiting to make a single large prepayment, consider consistent small payments. This approach not only reduces your interest burden but also keeps your repayment journey manageable.
5. Align prepayments with financial goals: Decide whether you want to reduce your EMI or shorten your tenure after prepayment. While reducing EMIs can ease monthly cash flow, cutting the tenure helps you save more on interest and become debt-free sooner.

Now that you have seen how part-prepayments can help you save on interest and repay your home loan faster, it is time to take the next step. With Bajaj Housing Finance Home Loan, you can explore a world of benefits tailored to meet your financial needs.

Already paying off a home loan? Transfer it to Bajaj Housing Finance to enjoy lower interest rates, flexible repayment options, and substantial savings. Planning to buy your dream home? Bajaj Housing Finance offers customised home loan solutions to make homeownership easy and stress-free.

No matter where you are in your home loan journey, Bajaj Housing Finance is here to help you reach your goals with smarter, more efficient solutions.

Here is why Bajaj Housing Finance is the right choice for your home loan:

1. High loan amounts: Fulfil your dream of owning a home with loan amounts of up to Rs. 15 crore*.
2. Low interest rates: Keep your EMIs light on your budget with interest rates starting at just 8.50%* p.a., meaning you pay only Rs. 759 per lakh*.
3. Flexible repayment options: Repay your loan comfortably with tenures extending up to 32 years*.
4. Easy application process: Enjoy an easy and quick application process and doorstep document pick-up service.
5. Balance transfer facility: Transfer your existing home loan to Bajaj Housing Finance, unlock a top-up loan of Rs. 1 crore* or more, and enjoy affordable interest rates.

Apply now and make your dream home a reality sooner than you think.

Moneycontrol Journalists are not involved in creation of this article.