Repay 20 year home loan in 11 years; Save Rs 30 lakh at once, experts are suggesting the number one solution:

How to repay home loan: Taking a home loan is easy. But paying it is a problem. Because every month a huge amount is withdrawn from your account. But if you make some changes and experiment with EMIs, the interest burden will reduce. For this you will not even need to change the bank. Your loan will be repaid immediately. You can repay a 20 year home loan in just 11 years. This will save you a good amount of money. If you invest that money somewhere good, you will get even higher returns.

This method proved beneficial.

According to an ET report, tax expert Sujit Bangar gave an example. According to him, by repaying the loan of Rs 60 lakh early, interest of more than Rs 30.6 lakh was saved. Bangar said the man repaid the loan early by adopting financial discipline, avoiding increased EMIs and unnecessary add-ons. This person had taken a loan of Rs 60 lakh for 20 years at 9% interest. Usually the first 10 years are spent in paying interest. Even after paying 120 EMIs, Rs 42.6 lakh remains of the loan. This means that initially more interest is deposited and less principal is deposited.

The magic of extra EMI

You too can experience this magic of paying off debt. For this, pay an additional EMI every year. Deposit an additional installment in the bank in the same month in which your EMI started. Due to this, the person’s loan installments i.e. 44 months were reduced. He saved Rs 14.85 lakh in interest. This is the benefit of one additional EMI per year. If you pay two additional EMIs in a year. So in five years the installments will be reduced by 10 months. The additional amount of interest on this will be reduced. This will also help in repaying the loan quickly. For this, financial discipline and planning will be required. Instead of 12 months, you will have to pay EMI for 13 months. For this you will have to keep aside some amount every month and see the magic.

Step-up EMI will save you lakhs

If you are employed and your salary has increased, you can save the difference amount and pay additional EMI every year. Or you can increase your EMI by 5% every year. This is called step-up EMI. That means your salary has increased. Or you are earning money by doing some part-time work. In such a situation, if you have inherited any ancestral property, then focus on increasing the EMI or depositing additional EMI. If you adopt both these methods, i.e. increase the annual EMI along with additional EMI, then the 20 year loan will be completed in approximately 11 years. This will save Rs 30.61 lakh.

If the bank is going to take term insurance, then pay the lump sum amount instead of EMI. This will reduce the monthly insurance amount. If you find an easy way to make money, try it. Invest this amount in a good mutual fund. With this, you will accumulate a huge amount of money in the next 20 years and this will help you in raising the amount to be spent on home loan.