A home loan is a long-term obligation. It runs for a longer tenor and affects your outlays unless you repay it.

It is why many people want to repay home loans faster. And to do that, a home loan prepayment is one of the considerable options.

But before going ahead with the home loan prepayment, you need to consider a few vital points. Read on!

1. Go for a lender who does not charge for a home loan prepayment

While applying for a home loan, you need to make sure that your lender won’t charge any amount for making home loan prepayment. If yes, you will save on it. If not, sometimes, the home loan prepayment charges may be higher than your savings.

2. Ask your lender to reduce the tenor against prepayments and not EMIs

Using the home loan calculator for EMI, you may have chosen your EMI amount carefully. You may go for a home loan prepayment when you receive any increment or bonus. But you should ensure that it does reduce your tenor and not subsequent EMI values. This way, you will be able to pay off your home loan faster and pay lower interest charges too.

3. Check if prepaying is good or investing the amount

You can use the home loan prepayment calculator to know if the housing loan interest you save while prepaying is higher than expected earnings from investing the money. If yes, there is no hard in going ahead with a home loan prepayment. If not, it would be advisable to consider investing the money.

Considering these 3 tips will help you make the most of prepaying your ongoing home loan and save money in the long run. If you want to include prepayments and pre-closure as your move to pay off your home loan, they are known as smart moves.