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How to Reduce EMI on Home Loan: 5 Best Ways to Know

2 Mins 28 May 2024 0 COMMENT
Reduce EMI on Home Loan

A home loan is a great form of financial assistance that can help you achieve your dream home. The loan is a long-term commitment, and repaying it is a hassle rather than applying or getting a sanction from the lender. Let's get to know repayment tips to manage Home Loans better.

A home loan is a popular way for home buyers to get the money they need. However, applying for a home loan can be a lengthy and detailed. Lenders have strict rules and regulations to follow since the loan amount is usually substantial. Even the smallest mistake in your application can result in your loan being rejected, which could be very costly for you in the long run.

As a home buyer, it can be financially draining to keep up with your monthly home loan payments, since you need to be regular with your EMIs. Additionally, the interest component of the loan can further add to your financial burden. However, if you have a solid plan in place, loan repayment doesn't have to be much of a hassle.

And, to answer your question about how to reduce the EMI of a home loan, let's learn some useful tips for repaying your home loan:

Tips to Reduce Home Loan EMI Amount

  1. Pre-payment of Loan:

    If you want to lower the interest payment on your loan, you can consider prepaying the loan amount. However, before doing so, it's important to confirm with the lender whether they charge any penalty or fee for prepayment, especially if the interest rate is fixed. In the case of a floating rate, no pre-closure charges are imposed.
  2. Do not choose a long loan tenure

    The interest rate charged by lenders is higher for Home Loans with longer tenures. Therefore, choose a shorter tenure if your finances allow for it. This will result in a faster repayment process with lower interest rates.
  3. Increase your EMI

    If you have a stable financial situation, you may consider increasing your EMI by 5% every year or paying more than one EMI within a year. This will significantly reduce the amount of interest you have to pay. First, estimate your financial requirements, then calculate home loan EMI,  and how much extra EMI you can afford in case of a salary increase or an annual bonus. Even if it is a small amount, it can have a substantial impact on your loan tenure.
  4. Look out for lower Interest rates

    You may want to research if lenders are offering lower interest rates, as this can help you easily opt for refinancing or a home loan balance transfer. Refinancing can be a great decision as it reduces the interest burden. This process involves transferring the outstanding principal amount from the old lender to a new lender at a lower rate. It's an easy and effective way to save on interest and utilize your savings for managing other financial obligations.
  5. Down Payment

    When you purchase a home, it is usually required that you make a down payment of at least 20% of the total purchase price. However, if you can make a higher down payment, the loan amount can be reduced, which may help you to secure a lower interest rate. This will ultimately facilitate a quicker repayment of your Home Loan.


It is important to be cautious of your financial situation when looking for a Home Loan EMI reduction. Do not exceed your disposable income.