If you’re already in the process of repaying a home loan or are thinking of applying for one, take a look at how prepayments can help you pay it off faster.
What do you mean by Home Loan Prepayment?
When you take a loan, you need to repay it every month in the form of EMIs over a tenure of your choice. Now if you have some extra money with you, you can pay it towards your loan before it is due.
Early repayments are called prepayments. This is usually a large amount, say, 3 times your EMI amount. The prepayments you make go toward reducing the outstanding principal of your loan. When the principal reduces, the interest also reduces proportionately.
When both the principal and interest components reduce, it results in lowering your EMIs as well. Here, you have two choices. You can keep the tenure constant and lower the EMI amount or you can keep the EMIs constant and reduce your tenure. The latter will help you pay off the housing loan faster. You can also avoid paying extra interest charges that come with longer tenures.
What is a Home Loan Prepayment Calculator?
A part payment or prepayment calculator is one that allows you to factor in prepayment plans. The results show you the impact of paying a part your loan in advance.
How to use the Home Loan Prepayment Calculator
Using this calculator is fairly simple. All you need to do is input the required details in the respective spaces. The calculator will generate the results automatically.
How the Home Loan Prepayment Calculator Works
Let’s now look at how this tool works. We’re assuming the following numbers to illustrate this:
Loan amount (principal) = Rs.20 lakh
Tenure = 20 years
Interest rate = 9% p.a.
Using an EMI calculator, you will see that your EMI without any prepayment is Rs.17,995.
Now let’s say you make a prepayment of Rs.1 lakh. Your EMI now will be Rs.17,095. That’s a reduction of Rs.900 every month (5% EMI savings). You can also choose to keep your EMIs at Rs.17,995 and reduce your tenure.
Using this calculator can help you find out how you can pay off your loan a lot faster.
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Chosen my home loan from DHFL. They have provided me a interest rate of 8% and there is no hidden charges deducted. They have disbursed the loan on time. I have selected the tenure period of 24 years. They are having a pre-closure facility with some charges. The documentation process was smooth.
I have taken Home loan through HDFC Bank directly.The rate of interest was nominal ,The loan amount got sanctioned on exact time frame .All the details about the loan process was clearly explained by the agent. and the process was smooth .The loan amount was sufficient and satisfied with the service as well.
From LIC housing i have taken my home loan. In other bank, there are lots of documentation process but in LIC, the document process is very less. Within 3 days, they have sanctioned the loan. I got the loan amount of Rs. 14.5 lakhs and i bought it 16 years back and the total tenure period of the loan is 20 years.
On two years before I had taken home loan with BAJAJ FINSERV. The amount was sufficient for tenure period of 20 years. Rate of interest was bit high, in case if charges get reduced, this detail will not be updated to customer from bank end. There is an option for a pre closure and part payment. Took one week to sanctioned a loan. One drawback was getting many calls for marketing purpose, per day I get 3-4 calls.
I have taken a home loan from Axis Bank, The loan amount was Rs. 25.75 lakhs and tenure was 20 years. Rate of interest what i am paying is 8.75 %. Customer service and responsiveness is good. Documentation process is very simple executive collected and i uploaded through online.
Purchased the home loan in SBI, 5 years back. I am paying the EMI amount of Rs. 22000 every months after i have taken the top up. They have provided me a interest rate of 7.25%. I got the loan amount of Rs. 27 lakhs and i have selected the tenure period of 240 months. They do have a partial payment and pre-closure facility without any additional charges.
Chosen my personal loan from Indiabulls because they have provided me a loan without any documents and it was a simple procedure and i have uploaded all the documents through mobile app. Within 3 days, they have sanctioned the loan. They have provided me a interest rate of 18%.
I took the home loan from Bajaj Finance but after 3 months, they have increased my interest rate. They provided me a interest rate of 8.65%. They said will give more benefits but they are charging as per the RBI rates. Since 2004, I have card for EMI facility.
I got the great experience in Bank of Baroda. I just visited the branch once and they have given a home loan on time. When i shifted to different place, i was planning to pre-closure the loan at the time the staffs are helpful. I bought the loan amount of Rs. 18 lakhs with the tenure period of 15 years but it got closed in 10 years.
HDFC home loan service is excellent because they are very transparent in giving the details. Their process is very clear. I bought the loan amount of Rs. 15 lakhs and it was taken for 20 years and the EMI amount was Rs. 15000 but i pre-closed the loan by last year. There is no hidden charges.
My home loan was taken from ICICI and they have deducted my EMI even before given the cheque to me. I have taken the loan amount of Rs. 40 lakhs in the year of 2012. Even before given the cheque to the builder they have taken the EMI amount of Rs. 55000 except processing fee. The loan has a tenure period of 10 years.
I never contacted SBI customer care service regarding a home loan services. Interest rate was less so I have chosen this bank for my home loan. The interest rate was nominal which is 8.35%. I got a loan amount of Rs. 50L and they are providing pre - closure and partial payment facility. I got a loan with in 1 week.
I have taken a home loan with PNB HOUSING FINANCE on 8 months before which was processed directly with them. At that time I was in need of money, other banks need all documents to submit for verification but in PNB process was good and they asked to submit required documents only. I was in need of 22L but they have sanctioned a amount of 21.20 L and tenure period of 30 years. Rate of interest is floating so as of now 8.15%. Pre closure option is applicable.
My salary account is in UCO bank so i had applied the home loan from the same. I bought the loan amount of Rs. 18 lakhs in that first they have sanctioned Rs. 10 lakhs and for the construction purpose, they have given Rs. 5 lakhs. They have provided me a interest rate of 8.5%. I have been paying the EMI amount of Rs. 18,500 for the duration of 30 years. They have sanctioned the loan immediately.
My home loan was taken from ICICI because i am a banking customer of ICICI from the year of 2012. I purchased the loan amount of Rs. 18 lakhs and i have been paying the EMI amount of Rs. 14900. I have selected the duration of 30 years. They have sanctioned the loan within 10 days.
For purchasing the open plot, I got a home loan from Fullerton. The open plot venture has tied up with Fullerton so I avail the loan with them. I got the loan amount of Rs.10 lakh for the rate of interest of 12%. I am paying EMI amount of Rs. 10,200 for tenure period of 20 years, since its plot come construction loan. Customer service done a proper follow up with the customer.
I have taken LIC home Loan on June 2018, to buy a flat, they have approved loan amount of Rs.26 lakhs with the interest rate of 8.45% floating type. I applied through bank executive and loan disbursement done with in a week. Processing fee is around Rs.12,000. I am not aware of the part-payments method.
My home loan is ongoing with Indiabulls since 5years back, it was taken. The rates are okay without any issues. The customer service is good. The loan tenure is 20years and the processing fee is included. I have purchased a Flat and the process was simple. Their executive helped me well.
I applied for the HDFC limited home loan through bank executive and the loan got disbursed with in one week. The required document are more. The approved loan amount is 17 lakhs for 25 years of tenure with rate of interest. of 8.90%. Processing fee is Rs.7000.
I applied for the HDFC Limited home loan before 4 years with the floating Interest rate of 8.65%, now the interest rate is 9.25%. The approved loan amount is 39 lakhs for 15 years of tenure. In between I have paid 3 part payment with out any charges. once payment done we can increase and reduce both EMI and tenure at the same time. The processing is zero but debited Rs.10,000 from loan amount. In last EMI would be reduced calculating the debited amount. The online transaction cannot be done for part payment, I have to go to bank directly to pay the amount.