Home Loan Prepayment: Save Lakhs by Timing it Right

• Prepaying a home loan early in its tenure significantly reduces the total interest paid, as initial EMIs are heavily skewed towards interest.
• One-off income sources like annual bonuses, ESOP payouts, or tax refunds are ideal for prepayments, as they don't strain monthly budgets.
• Always opt for tenure reduction instead of EMI reduction when prepaying to maximize interest savings and shorten the loan period.
• Falling interest rates offer a prime opportunity for prepayment, as a lump-sum payment at this time more effectively reduces the principal.
• Balance prepayment with financial health; avoid depleting emergency funds or selling long-term investments, and consider tax benefits.

Why It Matters: Strategic, early prepayments using surplus funds can save significant interest on home loans without compromising financial stability.