Unlocking Financial Freedom: Should You Consider Prepaying Your Home Loan?

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UNLOCKING FINANCIAL FREEDOM SHOULD YOU
CONSIDER PREPAYING YOUR HOME LOAN?
Director of Anurag Goel Ganga Pune
www.goelgangadevelopments.com/
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ACCELERATE MORTGAGE FREEDOM
When you commit to making your regular monthly
mortgage payments, a substantial portion of
those initial payments primarily services the
interest, while a smaller fraction goes towards
the principal amount. However, as the loan
matures, this equation begins to shift. A larger
share of each installment starts contributing to
reducing the principal. By making additional
payments, you can expedite your repayment
process and significantly reduce the overall
interest burden.
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THE POWER OF PREPAYMENT
Early in the home loan term, the interest
component dominates the monthly payments. As time
progresses, this balance shifts. According to
Amit Gupta, MD of SAG Infotech, prepaying your
principal amount substantially reduces the
accuracy of interest calculations in subsequent
months. This smart strategy minimizes interest
expenses and expedites your loan repayment
journey.
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INTEREST RATES AND PREPAYMENT
It' s important to note that prepayment is
typically free for loans with variable interest
rates. However, for loans with fixed interest
rates, prepayment fees may apply. According to
Gupta, this approach, which divides EMIs into
lower interest and higher principal components,
not only results in lower interest costs but
also accelerates the repayment of the principal
balance.
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EMBRACE FINANCIAL FREEDOM
Imagine a l ife where you' re no longer burdened
by regular home loan payments for an extended
period. According to Subhash Goel, Director of
Goel Ganga Developments, opting for a shorter
loan tenure not only grants financial freedom
but also peace of mind. It allows homeowners to
concentrate fully on other significant l ife
goals without the constant worry of mortgage
payments.
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