How to Reduce Home Loan EMI: In this era of rising inflation, buying your own house has become a challenge for everyone. In such a situation, most people take the help of a home loan while buying a house. But many times the fear of the burden of EMI for a long time becomes an obstacle in the dream of buying a house. Today we will tell you how you can get rid of EMI by making small changes in your home loan.

Recently, the terms of home loans have become easier due to tax relief and interest rate cuts by the government. In such a situation, this time can be a great opportunity to plan your loan again. If you increase your EMI a little, not only can your home loan be over quickly, but interest of lakhs of rupees can also be saved.

Saving of Rs 12 lakh-

Suppose you have taken a home loan of Rs 40 lakh for 20 years at an interest rate of 8.5%, then your EMI will be around Rs 34,713. Now suppose that due to the recent change in tax regime, your monthly savings are Rs 7,572. If you add 60% of this saving i.e. about Rs 4,500 to your existing EMI, then your loan duration will be reduced from 20 years to 15 years and 2 months.

The most important thing is that with this small change, you can save a total of Rs 12.02 lakh in interest. That is, along with the loan ending soon, you will also benefit financially.

Is investing in mutual funds a profitable deal?

Many people also choose the option of investing this extra money in mutual fund SIP. But is it more beneficial than repaying a home loan? Let's understand it this way-

If you invest Rs 4,500 every month in a mutual fund SIP for 10 years. Suppose you are getting a 12% return on this, then your total investment will be Rs 5.4 lakh. After 10 years, this amount can increase to around Rs 10.45 lakh. After-tax deduction, you will get around Rs 9.21 lakh.

Meanwhile, after 10 years, the outstanding principal of your loan will be Rs 28.14 lakh. If you invest thea entire amount of Rs 9.21 lakh in the loan, the principal will reduce to Rs 18.93 lakh. That means you will have to pay more than 9 lakh interest for the remaining 10 years. It is clear from this that making extra EMI payment can prove to be more beneficial than investing in mutual funds.

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