How can I Pay my Home Loan Faster?
Take a Look at Your Financial Plan
Take an overall look at your financial plan before you think of prepaying your home loan. Consider all the investments you have and the returns they are yielding. Once you are assured that your returns are sufficient to take care of your short, medium and long term financial goals, you can use the surplus for prepayment of loan. The emergency funds or set financial goals should not be compromised for prepayment.
Pay Fortnightly Instead of Monthly
Generally when you apply for loan, you choose the option of monthly EMIs. But if your salary increases, you can choose the option of fortnightly payment of EMIs. This will decrease the time period for your EMI payments. Your loan can be repaid sooner by adopting this method.
Most of the banks provide the option of N number of partial payments. Whenever you receive a festival bonus or performance bonus, you can use that amount for partial payment of your loan. Certain banks have a fixed number of partial payments that you can know from the bank officials.
Reduction in Cost of Living
Having your home loan paid off is reducing a great burden from your head. The unnecessary expenses on foreign vacation or buying latest electronic gadgets could be reduced. This reduction in cost over first few years of loan tenure will increase the savings resulting in sooner repayment of your loan.
Distributing the Responsibilities
Even if you are breadwinner of the family, you can involve other family members to help in prepayment of loan. Either they can help you financially or by saving some money. The family members could pitch in some ideas for local vacation place instead of an international vacation. Non-financial help such as redecoration of the house by family members themselves will also help to save some money and it can be applied for the prepayment of home loan.