Home Loan Prepayment & Tenure Reducer
See the exponential power of paying 1 extra EMI every year, adding ₹5,000 monthly, or putting in bonus lumpsums. Reduce your 20 or 25-year mortgage down to 12–14 years with zero bank prepayment penalties.
You save 23% of total loan interest payable to the bank!
Before vs After Prepayment Comparison
Under Reserve Bank of India (RBI) circulars, all banks (SBI, HDFC, ICICI, Axis, PNB) and Housing Finance Companies (LIC HFL, Bajaj) are legally prohibited from levying any prepayment or foreclosure charges on floating-rate individual home loans. You can prepay anytime without fees.
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Frequently Asked Questions (Home Loan Prepayment & Tenure Reduction)
Why does early prepayment save so much more interest? ▼
In a reducing balance loan, 70% to 85% of your EMI during the initial 5–8 years covers interest. Prepaying early reduces principal directly, permanently eliminating decades of compounded interest on that amount.
Does RBI allow home loan prepayment without penalties? ▼
Yes. Under Reserve Bank of India (RBI) circulars, all banks (SBI, HDFC, ICICI, Axis) and Housing Finance Companies (LIC HFL, Bajaj) are legally prohibited from levying any foreclosure or prepayment penalties on individual floating-rate home loans.
Is it better to reduce tenure or reduce monthly EMI? ▼
Reducing tenure saves dramatically more total interest because your debt compound clock is shortened. Reducing EMI only eases monthly cashflow while keeping the loan active for decades.
What is the 1 extra EMI per year strategy? ▼
By paying 13 EMIs instead of 12 each year (e.g. during annual bonus season), a 20-year home loan is typically paid off in approximately 15.5 to 16 years, saving over 20% to 25% of the total interest.
Does prepaying reduce my Section 24(b) tax benefit? ▼
Section 24(b) caps interest deduction at ₹2 Lakh per financial year for self-occupied homes under the Old Regime. If annual interest exceeds ₹2 Lakh, prepaying does not cost any tax benefits. Saving ₹15L–₹25L in real bank interest far outweighs fractional tax savings.
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