bhanu singh
Various persons give their various explanations for prepaying home loans. Some say that it is good, and some say it's bad. However, if you make a count, you'll get that, in most cases the prepaying option comes with many benefits to the people who want to save their money for the rest of their life.
Who can prepay a home loan?
According to the guidelines, any potential borrowers can prepay the home loan amount. However, if you want to do so, you must read the document before applying for a loan. Most banks and financial institutions mention the prepaying option in the application form for a home loan. You must check that out if you want to go with a prepaying option for your home loan.
However, sometimes, banks don't allow you to prepay the loan amount. Or, the bank can take additional charges as you move your asset through a credit channel. After all, as they serve people, they deserve some. But if you feel no trouble after paying the fine to prepay the loan amount, you can easily go for the prepaying option.
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While prepaying a home loan, you can go either with fast or slow payment in a partial way. However, you can prepay the loan amount in both ways.
When you prepay your loan amount, you should start with a small amount and gradually increase the prepaying amount. Thus, the bank feels much security, and they don't mind such a method. Therefore, you can take the help of a home loan calculator to calculate your assets.
You may fix the prepayment amount for every year. Thus, you can eliminate the tenure for the entire repayment option. For instance, you ought to give 6 lakhs Rs p.a. as EMIs. You can prepay 2 lakhs more during the year's end, which can impact the total tenure. It can, moreover, help you to cut down the interest rate.
It is another way of prepaying your home loan amount. You can pay some more money than your EMI every month. For instance, you should pay 25k as an EMI against your home loan. There, you can pay 35k per month, which makes an impact on your total balance. However, you must have much potential to pay more every month.
The last way to prepay your home loan is to pay in full. If you improve your financial stability to repay the loan amount at one time before the set time, you can go for that as a prepayment option. However, you may have to pay some penalty for it as you harm the asset of the concerned bank.
In conclusion, you can go for a prepay option against the home loan. However, you must remember the above information before taking such action.
