Partial prepayment immediately cuts principal, reducing total interest.Either EMI drops or tenure shortens depending on what your lender allows you to choose under the loan agreement.
Keeping EMI constant and reducing tenure maximizes interest savings and speeds freedom from debt. Dropping EMI improves monthly breathing room but leaves more interest paid over time.
Before aggressive prepayment, ensure retirement savings and emergency funds are on track — zero debt with zero investments is not nirvana if retrenchment hits.
Some tax benefits diminish as interest portion shrinks; model post-prepayment projections if old-regime deductions matter to you.
Floating-rate loans usually avoid prepayment penalties; fixed loans may differ — confirm with your lender annually.
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