5 ways to payoff home loan early

It is every ones dream to own a house and taking home loan to fulfill this dream is the most preferred way for most of them. But till you doesn't pay off your home loan house is not yours. So it’s also important to pay off the home loan early to get the full ownership of the house.

Let’s see how we can payoff the home loan early.

1. Opt for lesser tenure

Now these days some home loan lenders giving loan for 25 yrs tenure. Mostly people Opts for long tenure since long tenure reduces the EMI amount. Doesn't fall into this trap. You should understand that irrespective of tenure or EMI amount, the interest part EMI remains same. So if your interest rate is 11% that means you have to pay 11% interest annually irrespective of tenure, what it mean is the more is tenure the more interest you are paying.

You should opt for the minimum tenure you could afford. This will reduce the total interest paid.

2. Opt for special loan scheme

Different different lenders provide many schemes for home loan. Explore all the schemes and opt for the scheme which gives you most benefit. Some banks (SBI, SCB, PNB, IDBI etc) provides a scheme in which the amount you have in your saving account will be adjusted against principle while computing interest, this will reduce the interest. 

3. Transfer you loan to low interest     

  

Evaluate your current home loan interest with other lenders home loan interest. There are some good sites (www.bankbazzar.com, www.deal4loans.com) which can provide you  a compressive list of home loan interests from various lenders and sometime also provide discounts. So check time to time and if you found more than 0.5% difference, transfer your loan.

4. Do part payment with bonus or lump sum money

Got quarterly or half-yearly or yearly bonus or got lump sum amount or got some gift from someone or money back from money back insurance policy do part payment instead spending this money somewhere else. There will be no burden on you for doing this.

5. Increment EMI

Salaried people get salary hike every year, so it's a good idea to increase your EMI by the same percent as your salary hike.

These are some ways to payoff home loan early. So choose the one which suites you best.