Borrowers can foreclose a housing loan by making part or full prepayments. Though the RBI prohibits imposing foreclosure charges on variable-rate loans, fixed-rate loans still have foreclosure charges.
A lot of financial institutions offer pre-approved home loans, loan against property, and other kinds of loans. Applicants may check their pre-approved offers by inputting the required details. A lot of financial institutions offer pre-approved home loans, loan against property, and other kinds of loans. Applicants may check their pre-approved offers by inputting the required details.Thus, a home loan prepayment calculator is a very useful tool to calculate and plan out one’s EMIs while taking prepayment into account.
Step-by-step process on using a housing loan prepayment calculator
Here are 6 simple steps for using a home loan repayment calculator:
- Navigate to the ‘Home Loan’ page.
- Click ‘Part Prepayment Calculator’.
- Input the outstanding principal.
- Enter the interest rate.
- Input the remaining repayment tenor.
- Enter the prepayment amount.
What is home loan prepayment?
A housing loan prepayment is a payment option that allows borrowers to repay their home loan by making lumpsum payments before their repayment tenor ends. Prepayments typically exceed the given EMI value.
Individuals may choose to either pay the total loan quantum, and foreclose the loan or make a part-prepayment, which is essentially a part of the loan principal amount. Since interest rates increase with time, making a part-prepayment is a viable and affordable option for lowering one’s interest burden.
What is a home loan prepayment calculator?
Since manual calculation and analysis always have room for human error. To avoid this tedious calculation process, applicants should use an online home loan prepayment calculator.
The interest rate on a housing loan can vary depending on factors such as the borrower’s credit score, the loan amount, and the current market conditions. Most housing loans require a down payment, which is typically a percentage of the home’s purchase price. This down payment can range from 3% to 20% of the home’s value, and the larger the down payment, the lower the interest rate and monthly payments. It’s important for borrowers to carefully consider their financial situation and budget before taking out a housing loan, as this type of loan can have a significant impact on their long-term finances.
The home loan prepayment calculator is a free online calculation tool that helps individuals determine the outstanding EMIs and profitability of making advance payments before their housing loan tenor ends. A prepayment calculator allows borrowers to assess the following revised loan characteristics:
- Payable quantum
- Repayment tenor
- EMI savings
Borrowers must provide the following data to use a prepayment calculator:
- Loan amount
- Repayment tenor
- Interest rate
- Prepayment amount
What are the home loan prepayment rules and regulations?
Here are 3 home loan prepayment rules and regulations that assist borrowers and keep them from defaulting:
- There are no prepayment costs for a home loan balance transfer on variable-rate loans.
- There are no foreclosure or prepayment charges on variable-rate loans.
- The minimum prepayment amount must be equal to one of the EMIs.
Individuals can also use a home loan EMI calculator to compute monthly payables.
What are some tips to pay off home loans faster?
Here are 5 effective strategies to pay off a home loan faster:
1.Make part or full prepayments
Part prepayment of home loans helps borrowers in the following ways:
- Lessens principle amount
- Significantly lowers payable EMIs
- Makes paying off the loan within its repayment tenor easier
- Reduces overall financial load
2.Make larger down payments
Making a down payment while taking a home loan helps borrowers in the following ways:
- Reduces prepayment amount
- Lowers interest rates
- Significantly lessens debt burden
3.Opt for shorter repayment tenors
Choosing a shorter repayment tenor not only allows the debt to be cleared faster but also yields reduced interest rates and boosts credit scores.
4.Avail of lenders offering lower interest rates
Borrowers should compare interest rates offered by lenders and choose the one that suits their financial situation such that repayment does not become a burden.
5.Try paying higher EMIs
Paying larger amounts of EMI aids in significantly lowering one’s debt and overall financial load.
Home loan prepayment helps individuals save money, improve their credit scores, and lessen their financial burden. Thus, using a home loan prepayment calculator assists them in evaluating their savings and better planning their repayment schedule.