Why your home loan is paid in advance in advance is a smart financial move amid high interest rates and rising cost of living | Mint

Due to the wave of global inflation, interest rates have remained relatively high, together with a significant increase in living costs over the past few years. This urged the Indian homeowners to reconsider their long -term financial obligations. A powerful way to take control of your financial health and significantly reduce your total debt burden is through the best planning and prepayment of your home loan. Whether you are done fully or in part, the prepayment of your home loan can unlock several benefits. This includes improved creditworthiness, saving through reduced interest payments, and long-term profits such as reduced processing fees-just some of the benefits you can enjoy by proactively managing your home loan. This record is devoted to the discussion of the key points to keep in mind when considering the repayment of your home loan. Home loans interest rates in 2025: Homes loan interest rates at banks such as SBI, Kotak Bank, HDFC Bank, ICICI Bank, and others, are still about 9%. It is often noted that borrowers can pay 1.5 to 2 times the loan amount in interest over a typical 20-year refund period. For example, on a £ 75 Lakh loan at an interest rate of 9 percent, the total paid interest could exceed £ 85 lakhs if the loan is not repaid early. Expert views Rishi Anand, managing director and CEO of Aadhar Housing Finance Ltd, shared his opinion on the prepayment of a home loan in an exclusive conversation with coin. He said: “The prepayment of a home loan can be a financially sensible decision, especially in the early years of the loan period when the interest component is the highest. In the current scenario, it is advisable to choose a floating loan. With interest rates at their peak and expectations of the borrowing of the borrowing.” He added: “An additional benefit is the absence of prepayment fines on floating rate loans, which make part payments and complete prepayments easier and more cost-effective. There are different loan structures available; Choosing the right type depends on individual financial goals and the prevailing interest cycle. The industry data indicates that 80-85% of consumers’ preference is for the output of 33 trillion. and potential savings. “This record is focused on discussing five important points to keep in mind when considering the option of paying your home loan in advance: 1. Focus on reducing your overall interest-out. You should focus on reducing your total interest expenses. by which the total interest on your loan is reduced. Save what remains after spending, but spend what is left after saving. 2.. Determine peace of mind by bringing about financial freedom to reduce your home loan reduces your monthly EMIs. You to redirect funds for higher education, retirement plan, or even investments that offer higher returns in the future. History and low outstanding debt can increase your creditworthiness and improve your suitability for future credit – be it a personal loan, car loan, home loan or business financing. Lenders tend to benefit lenders with lower debt-to-income ratios. It is also important to maintain a relationship with low credit utilization as it shows that you are not too much dependent on debt or regular credit loans. 4. Tap on your home interest, remember that once you have completed the entire refund process of your home loan, your property becomes a full -fledged asset. This means that in the future you can further utilize your home’s equity through loans for household shares or loans on mortgage loans. These options usually provide relatively lower interest rates, higher loan amounts and more flexible repayment conditions – which depends entirely on your property’s market value. 5. No fine for prepayment on floating rate loans. There are ongoing discussions, spurred by the RBI, regarding prepayment conditions-especially fines on floating rate loans. Most banks and NBFCs currently do not charge a fine on a prepayment on floating rates of home loans. However, it remains a developing problem. It is advisable to contact your respective home loan provider for detailed information regarding appropriate interest rates, conditions of preparation and any possible fines. Conclusion, not only to save the closing of the home loan on interest rates. It’s about regaining financial control and strengthening your financial future. Before choosing prepayment, it is essential to carefully evaluate your existing financial obligations and challenges. Factors such as emergency fund management, potential investment returns and your total financial capacity should all be taken into account. It is always wise to repay your home loan if the interest rate on the loan exceeds the returns of low-risk investments. Taking these simple yet practical steps, lenders can improve their financial well -being, reduce tension and create space for wealth building opportunities in the future. Disclaimer: This article is for information purposes only and should not be considered financial advice. Consult a qualified financial advisor before making any loan -related decisions.