New Delhi, Sept. 2 -- A Rs.1 crore home loan can look manageable when viewed through the lens of an Rs.83,600 monthly EMI. But the real cost is far bigger. "The number that matters most isn't the principal but what you end up repaying," says Arijit Sen, SEBI Registered Investment Adviser, Co-Founder, Merry Mind.

For example, at roughly 8% p.a. over 20 years, the EMI is about Rs.83,600, and total repayment comes to roughly Rs.2.01 crore - so you pay about Rs.1.01 crore in interest.

So, answering what the best way to bring down this interest burden without putting too much pressure on your monthly budget is, Sen says, "Every rupee you prepay is a guaranteed, risk-free return equal to your loan rate. That makes early principal reduction on...