Pay EMI from the home loan ahead of time, you save a lot of money

The Reserve Bank of India (RBI) will announce monetary policy on Wednesday and this time millions of home loan holders of the country can get a great relief. It is reported that the RBI could lower the repo rate by up to 0.25 percent. If this happens, the interest rates of the home loan will fall, which will lower the monthly installment, that is, EMI. In such a situation, if you have entered into a home loan or consider adopting it, this time may be very important to you. It is important to understand how to repay EMI ahead of time and prepayment can improve your financial future. It not only reduces your total repayment amount, but also makes your credit rating strong. In this report we will understand how this trick is related to home loans and what you can benefit. What is the repo rate and what effect does this affect your loan? The repo rate is the rate at which the RBI loans give to commercial banks. When RBI lowers this rate, banks get loans at a cheaper rate and start giving loans to customers at cheap interest. For this reason, the reduction in repo rate has a direct impact on the EMI of home loan, car loans and other loans. If the repo rate is reduced by 0.25%this time, your home loan interest rates can be reduced. For example, if a customer took a £ 50 Lakh home loan at an interest rate of 9%for 20 years, and the interest rate dropped 0.25%, it could save up to around £ 8 lakhs if it paid off from time to time. Benefits of repayment of EMI in advance. 1. The interest burden is a low prepayment, ie some installments of your home loan prematurely; The main amount of your loan decreases. If the principal decreases, the interest on it also decreases. That is, a small prepayment that you have made from time to time can save millions of rupees in the future. 2. EMI will be taxed with light prepayment, your EMI amount can be reduced or your loan life can be reduced. Both options give you spiritual and financial relief. 3. Creditworthiness will be better home loan payment not only reduces your interest box, but it also improves your Cibil score. The Cibil score is a kind of creditworthiness, showing how serious your old debt paid. If your score is above 750, banks easily give you a loan and also offer you loans at better interest rates. Know what experts say? According to Mint’s report, Rishi Anand, managing director and CEO of Aadhaar Housing Finance Limited, says that the prepayment is a sensible decision financially of the home loan. If your home loan is at a floating rate, it usually has no fine before the payment. In such a situation, when your financial status is allowed, you can also place an amount in the loan. What is a floating rate house loan? The floating tariff house loan is one in which the interest rate changes over time. It is linked to the Repo rate. Once the RBI lowers or increases the repo rate, the interest rate of home loans with a floating rate also drops or rises. Repo rate cut = cheap EMI -Repo -Rate increase = expensive EMI, so for those who have a home loan with a floating rate, the change in RBI’s monetary policy is very important. How much does the current interest rates cost? By April 2025, the most important banks of the country such as the State Bank of India (SBI) HDFC Bank Kotak Mahindra Bank Icici Bank have all between 8.25% and 10.25%. These rates can change to a change in the monetary policy of RBI, which can make or repay and repay home loans. Why is the pre -payment plan for home loan? Home loans are usually taken for long periods – from 15 to 30 years. In such a situation, the total amount paid in the form of interest is more than the principal. In the meantime, if you make small prepayment, the duration of your loan will not only decline, but there will also be a major deduction in the total paid. For example, if you prepare £ 1 Lakh each year for a 20-year loan of £ 40 Lakh, you can save about £ 7-8 Lakh interest and the loan duration can also be reduced by 3-4 years. What should be kept in mind? There may be no fine for prepayment, especially on the floating rate loan. Read the loan agreement carefully before prepayment. If there are other loans, such as personal loan or credit card, you must first repay them as they have higher interest rates. Your emergency fund must remain. Do not push all the money into the prepayment. Conclusion: Right time, correct planning If you already pay home loans or plan to take, then this time is very important to you. RBI’s possible repo rate cuts can alleviate your monthly budget. You can also save millions from time to time. It is not just an economic decision, but a smart financial step that makes your future safe. Finally, remember: Every EMI you repay or repay, first reflects your financial responsibility, but also improves your future prospects. This time when RBI announces its policy, not only does the interest rates look at, but also makes a plan to handle your home loan wisely.