Welcome to FundooMoney, your 24X7 buddy on all your money matters! By prepaying your home loan, you can free yourself from a substantial financial obligation and re-direct the money towards investments for major future needs be it child’s higher education or your retirement. But before you do that how do you organise the money for the home loan prepayment? Don’t worry. We will provide you the answers in just a little while.
To raise money for your home loan prepayment, you could rely on the following things.
Regular savings for partial prepayment
Typically home loan providers have minimum limits for prepayment of home loan. This could range from one to many months of EMI. So, even with small amounts of regular savings made through instruments such as bank recurring deposit (RD) or systematic investment plan (SIP) of a liquid fund offered by mutual funds, one can raise money for a partial prepayment.
Future increase in income
Whenever your income rises, typically with a pay hike, ensure that you use most of it for partial prepayment of home loan. Again you can use an RD or a liquid fund SIP to raise the money for home loan prepayment.
Utilise windfall gains
Whenever you get any windfall gains like a bonus, incentive, gift or any unexpected income, you can direct most of the money for prepayment of home loan.
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