The home loan is the biggest loan in borrower's portfolio. Meanwhile, it helps you in building an asset, home loan EMIs also claim huge amount of your salary, making an affect on your overall budget.
It's always advised to pay your home loan as soon as possible. Here are some reasons:
Lowers the interest rate
A portion of income is allocated to interest cost due to home loan EMI. If you prepay a part of your loan, it goes towards the principal payment. The moment your principal amount decreses, the interest cost will also comes down. Paying off home loan early can save you lakhs of rupees.
Free your money for other goals
You'll save more money when you are no longer paying monthly installment of your home loan.
Reduce your credit usage
Prepaying home loans faster will reduce your credit usage. The overall budget may become more managable.
Eligibility to get other loans will increase
When you buy home loan, the chances of getting a personal loan will decrease due to some extent. If you have fewer existing debt obligations, lenders are more likely to offer you a larger loan amount.