Home loan repayment (foreclosure) refers to the complete repayment of the outstanding loan amount through a single payment without paying multiple EMIs. This is an existing facility in your home loan procedure, wherein you can settle your loan repayment prior to the scheduled EMI tenure.
Make sure you take the help of an online loan repayment calculator to know how much money you can save and how much money you will be paying depending on your remaining home loan repayment schedule. To know more, keep scrolling!
As per Reserve Bank of India’s regulations, NBFCs or banks cannot charge prepayment or foreclosure penalty on house loans that individual borrowers avail (with/without co-obligators). Moreover, lenders cannot impose prepayment/foreclosure penalties on loans that have a floating interest rate. This has been in effect since May 7 2014.
There are various ways through which you can make your home loan repayments. Here are a few of them:
Also Read: 5 Benefits Of Taking A Joint Home Loan
Using an online house loan repayment calculator is swift, easy and reliable. You just need to enter the following details:
Once you provide the above-mentioned information, your screen will display an accurate result within seconds.
It denotes the month in your home loan repayment schedule during which you repay your entire amount of loan in advance. Suppose your loan tenure is 6 years (72 months), and you decide to repay your remaining loan amount after 4 years 3 months (51st month). This 51st month will be your foreclosure month.
Many NBFCs and banks charge around 1% to 4% of the sum you’re paying. Contrarily, some financiers do not levy any fee for foreclosure or prepayment. In this case, repayment of your residual loan amount is a combination of interest and principal amount without any charge.
Manual loan repayment computation is a tedious and time-consuming process. If you want to get error-free and swift calculations, you must access an online housing loan prepayment calculator. This will make you well-informed and enhance your cash flows for managing the loan. So, go ahead!
What do you mean by a home loan repayment schedule?
The home loan repayment schedule or amortisation schedule is the data related to the EMI payments from the beginning till the end of the tenure. It represents the breakdown of interest and principal components of your loan each month.
What does a home loan provisional interest certificate mean?
A home loan provisional interest certificate is a borrower’s proof of loan repayment. It’s a summary of the loan repayments to date, which includes the interest and principal components of your home loan. You can download it from the official website of your lender. Using it, you can claim tax benefits.
Can I withdraw my Provident Fund for house loan repayment?
You may withdraw a maximum of 90% of your PF (Provident Fund) corpus for repaying your house loan. You can withdraw the money via online or offline mode.
To initiate the offline process, you can visit the EPFO portal and download the application form. After that, you can submit the filled-in application form and the required documents to your nearest EPFO office. For the online procedure, you need to visit the UAN portal and sign in with your ID and password.
What does a floating rate of interest mean?
A floating rate of interest denotes an interest rate that undergoes revision at regular intervals. The interest amount on your loan will depend on RBI’s base rate, which in turn varies due to economic factors. With variations in this base rate, your interest on a home loan will change.
Are there any tax deductions for home loan repayment?
As per Section 24 of the Income Tax Act, an individual can claim a tax deduction of up to Rs. 2 lakh on the home loan interest component for a self-occupied property. Additionally, Section 80C of the Income Tax Act offers Rs. 1.5 lakh deduction for the repayment of the principal amount of the housing loan.
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