Home loan repayment can help you save a considerable amount of money by saving on the interest component of your loan. By using a home loan repayment calculator and understanding your home loan foreclosure charges, you can plan to close your home loan quickly and easily if you have the necessary funds for it.
Home loan repayment is also called foreclosure of a home loan. It is the full repayment of the outstanding amount on a home loan through a single payment instead of paying in Equated Monthly Instalments (EMIs). You can use an online home loan repayment EMI calculator to understand exactly how much you will have to pay and how much you will save, based on your outstanding repayment schedules.
The following are the home loan repayment/foreclosure charges for major banks for the year 2022 for home loans with floating rate of interest:
|State Bank of India||Nil|
|Indiabulls Housing Loan||Nil|
|IIFL Housing Loan||Nil|
Reserve Bank of India guidelines state that banks or Non Banking Financial Companies cannot charge foreclosure or prepayment penalty on home loans that have a floating rate of interest and which are availed by individual borrowers (with or without co-obligators). This is with effect from 7 May 2014.
There are many ways in which you can repay your home loan and here are a few:
Home loan repayment schedule, also called amortisation schedule, is information, often given in a tabular format, about each EMI payment per month from the start to the end, with a breakdown of the principal component and interest component of the loan.
For a self-occupied property, you can claim up to Rs.2 lakh in tax deduction for the interest component of a home loan under Section 24 of the Income Tax Act. However, if the property is not self-occupied, the maximum tax deduction is Rs.2 lakh. Under Section 80C of the Income Tax Act, deduction of up to Rs.1.5 lakh is allowed for the repayment of the principal amount of the home loan.
You can withdraw up to 90% of your Provident Fund corpus to repay your home loan. You can do the withdrawal both offline and online. To do it offline, you can download a copy of the application form from the EPFO website and submit it to the EPFO office nearest to you or obtain the application form from the EPFO office and submit it after filling it and attaching the necessary documents. To do it online, all you have to do is visit the UAN website, log in with your ID and password, navigate to the ‘'Online Services’' page and proceed to the claim options.
A home loan provisional interest certificate is a proof of home loan repayments made by the borrower. It is a summary of the repayments done so far towards the principal and interest component of the home loan. It can be downloaded from the website of the financial institution from which you have availed the home loan. It is useful for claiming tax deductions.
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