I can prepay Rs2Olakh towards my home loan. Should I prepay in one go or stagger? I get rental income from the property? – Prashant from Delhi.
Prepayment of a loan has tax implications. You should consider all of them before taking a decision to prepay your loan. To do this you can use a ‘loan prepayment’ calculator on a loan advisory website. Usually, it is better to prepay a loan as long as you are not enjoying any additional tax benefit on account of payment of principal amount of the loan under Section 80C (that is, your other investments use up the full Rs 1 lakh limit and payment of the principal portion of the home loan does not result in any additional tax benefit under that section).
If that is the case, on a thumb rule basis, you might be better off prepaying in one shot. In any case, your rental income will remain unaffected by the prepayment.
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