Know-How You Can Systematically Pre-Pay Your Home Loan

 Purchasing a home is a once-in-a-lifetime experience for many people. This is due to the fact that it is one of the most expensive purchases a family would make, costing several lakhs of rupees. When a borrower goes above his financial means, it becomes tough to handle a home loan. Loan repayments might be challenging to manage when our lives are flooded with countless luxuries that rely on borrowed funds. The list of debts is endless: car loans, student loans, personal loans, vehicle loans, credit card bills, etc. Applicants, particularly those with a housing loan, must take a systematic approach to control their debts. A home loan prepayment calculator and home loan EMI calculator can come to your aid.

How to Pre-pay a Home Loan?

The Home Loan Prepayment Process consists of the following steps:

• Communication with the lender: If you're paying off the loan sooner than expected, let the lender know in writing.

• According to RBI regulations, pay the penalty (if any): Lenders are not allowed to levy penalty fees for pre-paying floating interest. However, some lenders may impose a fee for foreclosing on your mortgage.

• Foreclosure- After your first EMI is cleared, you can pre-pay any amount (equivalent to the sum of at least three EMIS) per transaction. The maximum amount you can pay toward your Home Loan Part Prepayment is unlimited.

Some Home Loan Prepayment Tips-

• Plan for prepayment early in the loan tenure.

• Evaluate benefits of using the funds other than for foreclosure.

• Obtain a letter of acknowledgement from the lender. 

• Obtain all original foreclosure documents.

• Before deciding, check the tax benefits.

Prepayment Guidelines for Home Loans-

• When you plan to pre-pay, bring a government-issued photo ID with you.

• Submit relevant documents to support prepayment.

• Collect the unused cheques from the lender to avoid misuse.

Many companies offering home loans do not charge any additional fees if your home loan is foreclosed. The Online Customer Portal of Housing Finance Companies allows advance repayment of loans. These companies also offer the lowest home loan interest rates, a tenor of up to 30 years, a high-value sanction, and a Home Loan Balance Transfer facility. To qualify, simply meet the easy housing loan eligibility criteria and submit the minimal documentation required to process the loan and await loan approval.

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