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Home Loan Repayment With Higher EMI

Home Loan Repayment With Higher EMI

Repaying your loan’s EMIs promptly reflects positively on your creditworthiness. You can talk with your bank or the financial institution, and schedule the EMI payment dates when you would be most comfortable and have sufficient funds in your account. Usually, the lenders fix the date closer to the date of receiving the salary. This helps minimize the chances of default and you have to pay penalties to the lenders. Apart from the EMIs and its timely payment, there are other benefits of repaying higher home loan EMI’s.

Home Loan Repayment with Higher EMI

Generally, a home loan runs high sometimes even into crores with the maximum tenure of up to 30 years. One has the flexibility in terms of selecting the tenure as per one’s convenience, which in turn would determine your EMI.Similar to all the loans, home loan EMI consists of two components- principal and interest. The interest constituent is higher in the initial phase compared to the principal component. Whereas towards the latter half of the tenure period, the principal constituent is higher than the interest. So a higher EMI will give you lower interest expenses along with a quicker repayment of the principal amount.

Benefits of Repaying Higher Home Loan EMI

1. Saving on the Interest

One of the major benefits of paying a higher EMI is that you save on paying more interest for your Home Loan.
In a gist, the higher the EMI the quicker would be the repayment, and lower would be the total interest cost. A Home Loan EMI Calculator available online can help you have a clear idea about your total cost, total savings and the estimated EMI which you can afford to pay.

2. Quicker Repayment of the Loan

A higher Home Loan EMI repayment will make certain of a quicker closing of your home loan. Repaying a home loan early not only makes you worry-free but also gives you the confidence of being financially stable.


3. Credit Score

Yet another advantage of a higher EMI of your Home Loan is that your credit rating as you repay your loan before the tenure period. This shows you as trustworthy for future borrowings as well. A higher EMI sum mirrors your money related capacities, and by repaying the entire loan amount in a shorter tenor, you show incredible liquidity of assets to the moneylenders.

4. Tax Benefits

Tax benefits on Home Loan repayments are one of the primary concerns for the home loan borrowers. Home loan tax benefits can be availed under Section 80C, Sec 24, and Sec 80EEA under the Income Tax Act. The benefit availed is against the principal component and interest component of your Home Loan EMI separately. On interest component one can avail a tax benefit up to Rs. 2 lakh under section 24 and Rs 1.5 lakh under section 80C on the principal component.


5. Proper Utilisation of Money

The only means to increase your Home Loan EMI amount is when you have surplus funds. So, if you have excess funds through any source, then the best way to utilize this surplus fund is by increasing your home loan EMI. This will give you several benefits while utilizing your funds positively you get good returns, as well as finish paying off the loan sooner.

Paying a home loan early not only clears your loan but provides you financial freedom and a worry-free life ahead.


Credit Score    Home Loan    Loan Against Property    balance-transfer    Business Loan    Personal Loan



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