Home Loan

Top Reasons Why You Should Pay The Home Loan Last If You Have Multiple Loans


Every household in India has multiple loans and EMIs to take care of today. When you have a salary coming in monthly, it becomes easier to pay off the monthly EMIs of the loan than to pay a huge amount at once. Though taking loans while keeping an eye on your cash flow and expenses is always a smart decision.  It will save you from complications in handling your finances later. 

There are multiple types of loans that are common in every household, such as home loans, vehicle loans, personal loans, credit card EMIs, etc. But life almost always comes up with surprises that you are not always ready to tackle. Similar ones are job loss, medical emergencies, or other unexpected expenses. These kinds of emergencies and expenses make it very hard to keep track of all the EMIs. 

In those times, it is very important to decide what EMIs/ loans are needed to pay off first, which one to pay off last and which one you can pass. To help you make a smart decision and make it easier for you, we have a list of reasons why you should pay home loans at last. It doesn’t only give you relief for some time but also helps you attain some benefits that you may not know of. On that note, here are all the reasons why you should be paying your home loans at last. 

List of Reasons Why You Should Pay Your Home Loan at Last

  1. Cheapest interest rate 

The most affordable loans are those for homes virtually invariably. It is better first to pay off the loans with the highest interest rates. These typically include personal loans and credit card debt. These loans have interest rates that can go up to 20%. On the other hand, some banks provide house loans with interest rates as low as 7% for specific sorts of borrowers. 

Look into strategies to lower your interest because it is on top of the principal. It is best to pay off the personal or credit card debt first because it has the highest interest rate. The next topic should be auto loans. Auto loans typically have fixed interest rates that are higher than those for mortgages. They currently stand around 78%. 

Auto loans should be repaid after a personal loan because the interest rates are higher than those on a home loan, and they are for depreciating assets like autos.

  1. Tax Advantages

You can deduct interest and principal payments made on your home loan from your taxes, unlike personal loans, credit card debt, and auto loans. 

Home loans should be paid back after all other debts because they have tax advantages. There are advantages to house loans, such as tax deductions for both principal & interest payments. This is advantageous over time because a house or property is an asset that appreciates, so you can attempt to hold onto it for some time.

You may deduct the main portion of your EMI payments for the year up to a maximum of Rs 1.5 lakh under Section 80C of the Income-tax Act. If you don’t sell the property within five years of receiving it, keep in mind that you can still claim this deduction. 

You may deduct up to Rs 2 lakh from the interest portion of the EMI by Section 24B. The house must be purchased or built using this loan and completed within five years of the end of the fiscal year in which the loan was obtained.

  1. Home/ Building An Investment 

Remember that a home loan is distinct from other types of loans as it assists you in acquiring an asset. A consumer loan or vehicle loan might also assist you in purchasing an asset. These assets, however, lose value over time, unlike a house. 

There is no greater sense of success than repaying a loan before it is due or having it taken away. You should bear in mind that there are additional fees for paying off a personal or auto loan early. These fees are not included in the majority of house loans. 

After paying off the total closing sum, don’t forget to get the lender’s “No Objection Certificate” (NOC). The closing will then be recorded in the credit bureau’s database.

Remember to request and obtain your original documentation and the lien release from the property or vehicle you pledged.

Final Words

Paying off loans is relieving, but knowing which loans to pay first and educating yourself about the benefits and deductions you are eligible for certain loans is advised. 

Always learn and get all the required information about the loans you are taking, the EMIs you have to pay, and the consequences of payoff, passing, or delaying an EMI. 

Piramal Finance is an Indian financial services company that provides personal loans, business loans, housing loans, and other financial products for you with a very simple process. Visit our website today for a simple and seamless instant personal loan process.


  1. Is having many loans a smart idea? 

Multiple loans might be an excellent strategy to improve your credit score. However, this is only useful if you can return all of your debts on time; otherwise, the move will be bad for your credit health.

  1. Is it possible to receive a personal loan if I already have a house loan? 

Yes, there is no upper limit on the number of loans that can be obtained at the same time. Technically, a personal loan and a home loan can be obtained concurrently. The prospect of repaying two debts at the same time may be intimidating. However, taking out both loans at the same time might be advantageous.

  1. If you have personal debt, is it difficult to secure a mortgage? 

A personal loan will always have a negative influence on your serviceability, even if it won’t make or break your prospects of getting a house loan,” the expert said. Any debt is a liability, and the more liabilities you have, the more difficult it will be for you to pay back your mortgage.