Rising interest rates? How to pay down your home loan faster

livemint.com:

HDFC Bank, India’s largest private sector lender, has been gradually raising its repo rate-linked home loan interest rates since January of this year. Despite the Reserve Bank of India (RBI) maintaining the repo rate unchanged since April of the previous year, HDFC Bank has increased its rates. As the name implies, repo rate-linked home loan rates are supposed to adjust in line with changes in the repo rate.

However, this increased interest rate results in a higher loan interest cost, prompting borrowers to seek ways to pay off their debt at an earlier stage in life. There are various strategies you can use to pay off your home loan more quickly and save a substantial amount on interest over the loan’s duration. Here are some effective approaches:

Make a larger initial payment: This decreases the total loan amount you need to borrow initially, leading to reduced interest payments over the loan’s duration.

Choose a shorter loan term: Choosing a 15-year loan over a 30-year loan will necessitate higher monthly payments, but you’ll pay off the loan more quickly and save on interest in the long term.

Make extra monthly payments: Contributing a bit more each month, beyond the minimum required payment, can substantially decrease the loan principal and shorten the repayment period.

Opt for bi-weekly payments: Some lenders permit bi-weekly payments. This boosts the number of payments you make annually, effectively expediting the repayment process.

Round up your monthly payment: Increase your monthly payment to the nearest hundred or thousand and allocate the extra amount towards the principal. This consistent, modest increase can result in considerable savings over the long term.

Refinance at a lower interest rate: If current