As soon as the home loan becomes cheaper, take this decision and hit a four on the spot… you will save lakhs of rupees, the bank will be stunned

RBI has started cutting the repo rate. After February, the repo rate has been reduced again in April 2025. It is expected that it may be even lower in the coming time. If the repo rate decreases, then obviously the interest on your loan will also be reduced. For those who have taken a home loan, this is a good opportunity to reduce the burden of the loan and save lakhs of rupees of interest. On this occasion, by taking just one smart decision, you can hit a four on the spot and save your lakhs of rupees. If you use this brain, then even the bank will be stunned and will think wow what a brain you have used.

As soon as the interest is reduced, you should decide to prepay the home loan as soon as possible. Through this, you can repay your home loan partially or fully. Prepayment reduces your principal amount, which reduces the loan amount. The time taken to repay your loan is reduced. The direct benefit of reduction in principal amount and loan tenure is on interest. This saves lakhs of rupees paid as interest. There are many ways to make prepayment. Know about them in the slides below.

According to the information given on the website of Bank of Baroda, one way to prepay home loan is to start prepayment with a small amount and keep increasing this amount at a fixed rate every year. For this, you will have to save a little every year. You can make prepayment with this amount of savings.

You can also reduce your principal by paying a fixed amount every year. You plan your expenses for the whole year and make prepayment by paying a fixed amount every year. This will reduce your principal amount rapidly and your loan will reduce rapidly.

One way to reduce your principal amount through prepayment is to pay more than your calculated EMI. You have to do this every month. This method is also very helpful in reducing the debt burden quickly.

If your financial condition has improved and your financial status is good now, then you can pay the entire amount of home loan in one go before the completion of the tenure and finish your loan.