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Ways to Reduce Home Loan Tenure and EMI

  • Highlights

  • Bargain for lower interest rates

  • Pre-pay the loan to reduce EMI and tenure

  • Keep a tight lid on interest outgo with higher EMI amount

  • Pay an extra EMI every year to save on interest

Having your own home means a sense of security, safety, and comfort. Due to this, home loans are the most popular loans in the market because everybody wants a haven that they can call their own.

A home loan is offered by a financial institution on criteria such as the value of the property, the income of the borrower, his/her current liabilities and the collateral offered. Usually, the amount of home loan sanctioned is about 80-85% of the home value. This amount is repaid to the lender along with interest through Easy Monthly Instalments (EMIs). Since the amount of a home loans is substantial, the tenure is long and can stretch up to 15-20 years or even more.

While a longer tenure may seem convenient, it has a major flipside. It significantly increases the cost of the loan in terms of the interest payments. If you want to avoid a lifetime worth of EMIs, here’s how you can reduce the tenure of the loan along with the EMIs.

Lower interest rates

The interest rate plays a major role in determining the EMI and you should be on the lookout for loans with lower interest rates. Do your research and bargain with your lender. The lower the interest rate, the lower is the repayment burden. A healthy credit score goes a long way in securing a loan at a competitive interest rate.


One of the most effective ways to reduce your home loan EMI and tenure is through prepayment. In case you have a sudden extra inflow of cash, through a raise in your salary or a bonus, then you can pay back a huge part of the loan to the lender in one go. This would directly affect the principal amount to be paid, reducing the tenure and thereby the EMI.

Increase the EMI amount

The higher the amount of EMI, the lower is the financial burden of the loan. You should increase the amount of EMI to as much as you can practically afford. This reduces the repayment time and hence the cost of loan.

You should also be on the lookout for schemes where you can eventually increase your EMI payments to match up to your income increase.

Home Loan EMI Calculator

Paying an extra EMI every year

By paying an extra EMI every year, not only do you bring down the loan tenure but also keep a tight lid on the interest outgo. Most lenders will not mind accepting an extra EMI at the end of the year. An extra EMI every year brings down the principal amount and helps you close a loan earlier than the stipulated tenure.

These are the few effective ways in which you can reduce the financial burden of a home loan. Apply for a home loan with Bajaj Finserv to avail funds at competitive interest rates. Also, pre-approved offer on home loans and others make it easy to avail finance. Just share a few basic details and know your pre-approved offer.

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