New Delhi: Home loans can take a significant chunk of your life and income to repay, often leaving borrowers paying nearly double the principal amount over time. However, smart repayment strategies can help you pay off your loan faster and save lakhs. CA Nitin Kaushik recently shared a simple yet effective approach on social media platform X, which could save borrowers millions.
Split Your EMI: Most borrowers treat a 20–30 year home loan tenure as fixed. Kaushik suggests a minor change in the payment schedule to reduce interest burden. Instead of paying the full EMI once a month, borrowers can split the EMI into two halves and pay every 15 days.
How It Works: Normally, paying monthly EMIs results in 12 payments a year. By switching to bi-monthly half-payments, you make 26 half-payments annually, which equals 13 full EMIs. The extra EMI payment directly reduces your principal, helping lower the overall interest and speeding up loan repayment.
Potential Savings: For a loan of ₹50–60 lakh at 8–9% interest, following this method could help clear the loan 6–7 years early, saving ₹12–18 lakh in interest, depending on the remaining tenure and loan conditions. Kaushik emphasizes that this is not a gimmick, but a simple, smart approach that works quietly over time.
Check Your Bank Policy: Kaushik advises borrowers to confirm with their bank, as not all banks allow bi-monthly payments. Consistently reducing the principal through frequent payments can lead to significant savings in the long run.
Bottom Line: Borrowers looking to cut home loan costs and reduce EMI burden can benefit from this strategy, ensuring faster loan repayment and substantial financial relief.
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