WATCH | Cut your home loan burden by Rs 10 lakh with these 3 smart strategies

Homebuying hacks: Homebuying can feel like a daunting financial commitment, especially when you factor in lengthy repayment process of a housing loan. However, with a few smart strategies, you can make process easier and reduce your loan burden notably. Here are three tips that could help you save around Rs 10 lakh.

Use prepayment to cut down your loan tenure

One of most effective ways to reduce your home loan burden is through prepayment. Prepayment allows you to pay off your loan faster by making extra payments over and above your regular EMIs, eir as a partial amount or a lump sum. This can help shorten your loan tenure and reduce total interest you pay.

For example, imagine taking a home loan of Rs 50 lakh for 20 years at an 8.5 per cent interest rate. Your monthly EMI would be approximately Rs 43,391. Without prepayments, you would end up paying around Rs 54.14 lakh in interest, with a total payment of over Rs 1 crore.

However, if you make an annual prepayment of Rs 50,000 starting from second year, you could reduce your loan tenure by around three years. You would effectively pay off loan in just 17 years and one month inste of 20 years. key to prepayment is using any extra income, such as bonuses or tax returns, to chip away at your loan.

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Take vantage of stamp duty concessions for women

Stamp duty is a significant expense when buying property, but re are savings to be me, particularly for women homebuyers. In several states, women receive a concession on stamp duty rates typically 1 per cent to 2 per cent lower than standard rate.

For instance, if you're purchasing a Rs 1 crore property with a 7 per cent stamp duty rate, you would typically pay Rs 7 lakh in stamp duty. However, if property is registered in a woman's name, you may only need to pay 5 per cent, saving you Rs 2 lakh instantly. This can make a considerable difference in overall cost of buying a home.

Maximise tax benefits with co-applicants

Anor way to ease financial burden of homebuying is by taking full vantage of tax benefits. Under old tax regime, an individual can claim up to Rs 2 lakh as a tax deduction on interest paid for a home loan. If property is co-owned and loan has co-applicants, each person can claim this deduction separately, doubling total deduction to Rs 4 lakh.

In dition to tax benefits, having a co-applicant, especially an earning family member, can increase your chances of loan approval and may allow you to qualify for a higher loan amount.

By leveraging prepayment options, exploring stamp duty concessions, and optimising tax benefits with co-applicants, one can notably reduce financial strain of buying a home.