Home Loan Repayment Calculator - Check Best ways to Make Home Loan Repayment

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.

What is Home Loan Repayment?

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.

Top Home Loans with Zero Repayment/foreclosure Charges

The following are the home loan repayment/foreclosure charges for major banks for the year 2023 for home loans with floating rate of interest:

• State Bank of India-Nil
• HDFC Ltd-Nil
• Axis Bank-Nil
• Indiabulls Housing Loan-Nil
• TATA Capital-Nil
• IDBI Bank-Nil

RBI Guidelines on Home Loan Foreclosure Penalty

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.

Best ways to Make Home Loan Repayment

There are many ways in which you can repay your home loan and here are a few:

1. Use your bonuses, monthly surplus, or incentives to make part-payments on a regular basis that will gradually cut down the interest or principal component of your home loan. You can start off with small amounts but gradually increase it as your surplus funds increase. Or you could save all the monthly surplus and yearly bonuses and prepay a large amount every year.
2. Liquidate your mutual fund or other portfolios that are not paying high returns and use it to make prepayments on your home loan, thereby saving interest and money in the long term. Paying high premiums but getting lower returns may not be cost-effective in the long run. Using that to pay off a high-interest home loan may help you save more money.
3. Increase your EMIs but reduce your tenure. This will help you pay off the home loan more faster or might even be equivalent to making a part-payment on the home loan.
4. Link your home loan account with your current account with the same bank if such a facility is offered. The interest rate on the home loan will then be calculated on the basis of the outstanding balance of the home loan minus the balance amount in the current account.
5. Choose loans that have the option of increasing EMIs in later years. As your salary or income is likely to increase as the years go by, paying a lower EMI at the start of your career and then increasing the EMIs as you climb up the corporate ladder will help you pay off your home loan faster and also save on the interest.
6. You can also choose loans that have decreasing EMIs, which will come in handy if you have taken the loan at older ages and have adequate disposable income now but may have a reduction in income as the years go by. This will still help you pay off your home loan faster and save on interest as a large portion of the loan gets repaid in the initial years itself.
7. Home loan with waiver of EMI is offered by certain banks where if you have paid your home loan EMIs regularly over a period of time, you are given a few months of EMI waiver after a specified number of years. This will help you save money as well as give you a breather in between the loan-repayment years.

FAQs on Home Loan Repayment Calculator

1. What is Home Loan Repayment Schedule?

   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.

2. What are the tax benefits of home loan repayment?

   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.

3. How to withdraw pf for home loan repayment?

   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.

4. What is home loan provisional Interest certificate?

   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.