Some time ago, a big cut has been made in the Repo Rate by the Reserve Bank of India (RBI). First, in February, the interest rate was reduced by 0.25 percent, and then again in April, it was cut by 0.25 percent. After this, many banks also decided to cut their interest rates. This has given a lot of relief to home loan borrowers because their EMI has decreased. In such a situation, if you show a little smartness, you can repay your home loan much before time and can also save lakhs of rupees. Let's know 3 ways to save lakhs of rupees on home loans.

1- Make some prepayments in between

Many times people get some money at once in the form of a bonus, gift, or incentive. If you have taken a home loan, then the best use of this money would be to use it to make a partial payment of the home loan. Let us assume that you have a home loan of Rs 40 lakh outstanding, the interest rate of which is 8 percent and the remaining period is 20 years.

If you pay even Rs 1 lakh, then your home loan will end 14 months earlier and you will save Rs 3.72 lakh going in interest. If you pay Rs 2 lakh, then the loan will end 27 months earlier and Rs 7.03 lakh will be saved in interest. If you pay Rs 3 lakh, then your loan will end 38 months earlier and Rs 10 lakh will also be saved.

On the other hand, if you get some extra money and you pay Rs 4 lakh in lump sum, then your loan will end 50 months earlier and you will save Rs 12.67 lakh in interest. Apart from this, if you pay Rs 5 lakh, then your loan will end 60 months i.e. 5 years earlier and you will save Rs 15.11 lakh in interest.

2- Pay a fixed amount every year

If you feel that you get some extra money once every year or you can save some money, then pay a fixed amount every year. This will result in saving the money spent on the interest of your home loan by paying a little money every year. Here also let us assume that you have a home loan of Rs 40 lakh outstanding, whose interest rate is 8 percent and the remaining period is 20 years.

If you pay an additional Rs 50,000 every year, then your loan will end 57 months earlier and you will save Rs 11.11 lakh. If you pay Rs 1 lakh every year, the loan will be over 90 months earlier and you will save Rs 17.33 lakh from going in interest. If you pay Rs 2 lakh every year, your loan will be over 122 months i.e. about 10 months earlier and on top of that, you will also save about Rs 24.24 lakh going in interest.

3- Increase your EMI

When any person takes a home loan, he keeps the loan period and EMI according to his income at that time. However, his salary increases a little every year. If your salary has increased well, then you should increase your EMI.

Let us assume that you have a home loan of Rs 40 lakh outstanding, the interest rate of which is 8 percent and the remaining period is 20 years. According to this, your EMI will be Rs 33,458. If you increase it by just Rs 722 and make it Rs 34,180, you will save around Rs 2.37 lakh in interest and your loan will also end 12 months earlier.

If you can increase it by Rs 1541, your loan will end 24 months i.e. two years earlier and you will also save Rs 4.7 lakh in interest. On the other hand, if you increase your EMI by Rs 4,768, your loan will end 5 years earlier and you will also save Rs 11.49 lakh, which would have been spent on interest.