Still paying your home loan the hard way? These 2 hacks could save you over ₹30 lakh

A 20-year home loan doesn’t have to last 20 years—or cost you a fortune in interest. According to Sujit Bangar, founder of TaxBuddy.com, small tweaks in repayment strategy can slash both the tenure and interest burden by nearly half.

In a LinkedIn post, Bangar shared the case of Suraj, who took a ₹60 lakh home loan at 9 percent interest for 20 years. By applying a few simple techniques, he saved over ₹30.6 lakh in interest and closed the loan nearly nine years early.

The key insight: in the first decade, your EMI mostly goes toward interest, not principal. After 10 years, despite 120 payments, you still owe ₹42.6 lakh. That’s why early and smart prepayments matter.

Bangar recommended two main strategies. First, pay one extra EMI every year—essentially a 13th month’s payment. In Suraj’s case, this saved him ₹14.85 lakh and cut down the loan term by nearly 44 months.

Second, use a 5 percent annual step-up in EMIs as income rises. This alone brought down Suraj’s loan term to 12.4 years and saved him ₹25.72 lakh in interest.

For maximum impact, combining both tactics—the extra EMI and the annual step-up—reduced the loan period to just 11 years and saved ₹30.6 lakh in interest.

Other key tips included front-loading prepayments during the first five to seven years, when interest makes up the bulk of each EMI. He also advised automating the extra EMI using a standing instruction, ideally timed with a salary or bonus month, to reduce dependency on willpower.

Lastly, Bangar warned borrowers not to blindly accept bundled insurance with home loans. Multi-year policies tied to the loan are often pushed as “mandatory,” but opting for standalone term insurance can free up extra money for prepayments.