Outlook Money
A home loan pre-payment is when you repay your loan in case of unexpected gains or a surplus of money before the agreed-upon tenure for which you took your loan.
A person should weigh the pros and cons of pre-payment such as if the surplus can generate a return it is better than paying the loan early.
The old tax regime provides tax deductions in home loan repayment while the new regime does not. Choose according to your tax regime.
Pre-payment of a loan can help you lower your EMI, resulting in ease of burden caused by the monthly financial obligation.
You can choose to alter the loan closure tenure if you pre-pay, allowing you to be debt-free early, which is the case for most retirees.
As the interest is calculated on the principal amount borrowed, a reduction in the principal amount can help you save drastically on interest