EMI weighing you down? 7 smart shortcuts to repay your home loan faster

Paying off a home loan can feel like a never-ending journey, but with a few smart moves, you can reach the finish line much sooner.

According to Adhil Shetty, CEO of BankBazaar.com, several practical hacks can help borrowers reduce their loan burden quickly and save big on interest. From maintaining a strong credit score to making small but strategic pre-payments, each technique is designed to chip away at your debt more efficiently. Whether you are just starting out or are already a few years into your loan, these seven tips can help you clear your dues faster.

Shetty outlines seven effective hacks to help repay home loans faster.

Maintain a good credit score: Your interest rate is linked to your credit score, which can be ensured by timely payment of all EMIs and credit card dues. Being a super-prime borrower (having score more than 800) helps you get a great rate.

Refinance to a lower rate: Ensuring your loan interest rate is close to the best in the market will help you get out of debt faster. A refinance once every few years can keep you aligned to the best rates in the market.

Pay an extra EMI once a year: Extra payments help you save interest and get out of debt faster. One extra EMI paid at the end of every loan year can shorten your tenor. For instance, a 20-year loan can be paid off in about 16 years.

Use the 5% method: Strategic lump sum pre-payments move mountains. Pre-paying just 5% of your loan balance once a year can make your EMIs more effective and closer out a 20-year loan in about 12.

Race to the halfway mark is simple: It takes about 60-70% of your loan tenor to pay only 50% of the loan via only EMIs. Make your journey shorter. Get to the 50% mark faster by pre-paying. This makes the second half easier.

Get to EMI breakeven fast: It takes about 40-75% of your loan tenor for your EMI principal and interest to equalise. Get there faster using pre-payments. This makes your EMIs more effective and cuts your interest.

Hike your own EMIs voluntarily: Voluntary EMI hikes are one of the most powerful ways of getting out of debt fast. Even a minor 5-10% increase in your EMIs once a year can help you accelerate out of debt.