A prepayment or foreclosure is possible for borrowers if they can pay off the entire loan amount before the specified tenor. Since a loan against property is a prolonged financial commitment, borrowers often want to close the loan account as early as possible to get back the mortgaged asset.
Thankfully, as per RBI guidelines, borrowers can prepay or foreclose property loans during their repayment period and achieve their financial goals.
What is a loan against property prepayment/foreclosure?
When planning to apply for loan against property online, prepayment and foreclosure are some features proffered by various lending institutions with some nominal additional charge. Concerning prepayment, borrowers can repay remaining principal sum instead of EMIs when they have excess funds in hand.
By making a prepayment, borrowers can considerably reduce overall payable interest component and make the debt affordable for them. By doing this, they can lower applicable tenor, which will be effective in the long run.
On the other hand, foreclosing a loan against property will allow borrowers to repay remaining credit before the scheduled period. Borrowers can choose paid EMIs and month when deciding on loan foreclosure.
When choosing any of the options, borrowers can take the help of a loan against property EMI calculator to get a fair idea about their savings and make an informed decision for future.
However, it is essential to learn about a loan against property interest rate and take a decision of prepayment or foreclosure to avoid additional interest payment during the loan tenor.
To conclude, before choosing any of the options for loan against property, it is wise to assess all the factors to avoid additional borrowing costs.
Read Also: What Is The Fixed Rate Of Interest On A Loan Against Property?
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