India, Feb. 27 -- Financial prudence suggests eliminating liabilities as soon as possible, and prepaying your home loan can be a wise move if you have surplus funds. However, the decision to prepay or retain a home loan also depends on the tax regime you choose.

Prepayment is particularly beneficial for those nearing retirement, helping them clear liabilities before their income stream decreases. In addition to reducing the overall interest burden, prepayment can shorten the loan tenure, improve credit scores, and provide greater financial security by lowering monthly obligations, says Raoul Kapoor, Co-CEO of Andromeda Sales and Distribution.

"Carrying a large housing loan can become a psychological burden for many people. The constant ...