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Tata Capital > Blog > Loan for Home > 5 Smart Strategies For To Repay Your Home Loan Early

Loan for Home

5 Smart Strategies For To Repay Your Home Loan Early

5 Smart Strategies For To Repay Your Home Loan Early

The repayment of housing loans lies heavily on many a homeowner's head. For those looking to repay their loans quickly, this article will discuss 6 smart strategies for resolving their debts early. From actively tracking a borrower's progress with a home loan repayment calculator to exploring other alternatives like tax benefits, these strategies will help anyone tackle the debt easily.

Prioritising Your Savings:

The first step toward the repayment of a housing loan early is creating a budget and allocating resources towards paying off one's loan. This can vary from person to person depending on their income, expenses, and savings goals. But the general formula is to allocate roughly 20-25% of the homeowner's income towards debt repayment. 

Next, it is important to understand one's financial situation and determine how much one can afford to pay each month as an EMI. Use various online calculators like the home loan repayment calculator or the home loan EMI calculator to determine one's EMIs for different loan amounts, tenures and interest rates. A home loan repayment calculator will help the borrower decide on a comfortable repayment period and also help them plan their budget better.

Once the homeowner has a clear understanding of how much they can afford to pay each month using a home loan repayment calculator or a home loan EMI calculator, they can prioritise their savings towards this goal. By doing so, they'll be able to understand how much they can realistically afford to pay off each month and create a plan for accelerated debt repayment.

It’s important to take into account additional expenses such as maintenance costs and property taxes when estimating the total cost of the loan.

Calculating Your Extra Payments:

Once a borrower has a clear budget in place, it's time to calculate how much extra money they can put towards the mortgage repayments each month. A good way to do this is by using a home loan repayment calculator, which will let them compare different payment plans and calculate the effect of making extra payments on their total loan amount. 

By calculating extra payments early using a home loan repayment calculator or a home loan EMI calculator, they’ll be able to pay off their loan faster and save thousands of rupees in interest costs over the life of the loan.

If one makes extra payments on their loan, it will help them pay off their loan faster and with less interest. Try talking to the bank or mortgage broker about what extra payments they can approve.

Striking the Right Balance Between Debt and Savings:

Paying off one's home mortgage repayments quickly does not mean neglecting other financial priorities such as saving for retirement or emergency funds. As with any financial decision, it is important to strike a balance between debt and savings so that a person can pay off their debts while still setting aside money for other goals. 

However, if the customer has been struggling to achieve any of their financial goals, such as saving for retirement or building up an emergency fund, then a home loan might be preventing them from achieving those goals. In such a case, it might be worth considering paying off their home loan quickly.

Exploring Other Alternatives To Repayment Of Housing Loan Quickly:

If the traditional methods of paying off a home loan are not feasible, some alternative strategies may work better in certain cases. Refinancing or taking out another line of credit can be an effective way to accelerate debt repayment if done properly.

Be sure to consider all available options before deciding on a particular course of action so that one can make an informed decision about which strategy will work best for their situation.

With technological advancements, there are now several new home loan options available offered by banks and non-banking financial companies (NBFC) that offer attractive interest rates compared to traditional means. These include fixed-rate loans, variable-rate loans, flexi loans, etc.

There are also co-borrowing options which allow two people to take out a joint loan together allowing them both to benefit from each other's income streams. Customers should ensure they understand the features offered by each.

Additionally, there are also special offers available from time to time that could make the quick repayment of a housing loan even more attractive.

Don’t forget that not all banks and financial institutions offer the same terms for home loans. This means it’s important that one checks the rate in the home loan EMI calculator at various banks and compares different lenders to find the one that offers the best terms.

Borrowers should also consider factors such as processing fees, prepayment penalties, pre-payment charges, etc. while selecting the right bank or financial institution for their loan. 

Making The Most Of Tax Benefits For Repayment Of Housing Loan:

Many people are unaware there are tax benefits to repaying their home loans. Whether it’s deductions or credits on interest payments and property taxes, these tax benefits can help reduce the amount of time it takes to repay a person's home loans significantly.

Many banks offer tax exemptions on certain types of home loans depending upon their tenure and type. Most lenders offer tax exemptions under Section 24 and Section 80C, which allow up to Rs. 1 lakh deduction per financial year when taken jointly with other savings like PPF and insurance premiums.

Moreover, some lenders also offer tax benefits under Section 80EEA, which allows an additional deduction of up to Rs. 1.5 lakh per financial year when certain criteria are met.

Keep in mind to look into these options when taking out a new loan. They could help save money for other important expenses. 

Before taking advantage of these tax savings opportunities, be sure to check with a qualified accountant for more information on what may be available in specific situations. Do check with lenders on their eligible products and benefits before taking a decision.

Maintain A Low Debt-To-Income Ratio For Optimal Financial Health:

Keeping track of one's debt-to-income ratio (how much debt one has relative to how much one earns) is key when it comes time to repaying one's home loans quickly and efficiently. The ideal debt-to-income ratio is no more than thirty per cent.

Having a high debt-to-income ratio (meaning borrowing more than what one earns) is detrimental both financially and in terms of credit scores. A high debt-to-income ratio can ultimately lead to a borrower having trouble repaying their home loans on time. 

To maintain optimal financial health, pay attention to how much debt one has taken out relative to their income level and make adjustments accordingly.

In addition, it’s important not just to have a healthy debt-to-income ratio but also to keep track of other important financial ratios, like the asset-to-liability ratio and the interest coverage ratio.


There is no denying that taking a home loan can be a huge financial burden. With the ever-increasing interest rates and rising prices of real estate, the EMI burden can become too much to bear if not calculated and managed correctly. It can take years to pay off a home loan.

There are ways to reduce the amount of time one spends repaying their loans and save a lot of money in interest. Whether someone is a first-time home buyer or is looking to refinance their mortgage, by following these 6 smart strategies, they should be able to achieve their goal of repaying their home loans quickly while also maintaining financial health in the future.

Additionally, here's where one can benefit from TATA Capital's home loan. Since it is essentially a one-stop shop for all one's financial monitoring needs, it allows users to track their progress towards achieving financial freedom. With real-time updates on repayments, smooth integration into core banking systems and personalised alerts for savings and reward opportunities, customers will be able to manage their finances easier than before.

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