How to close home loan early?

Here are the details about how to close the home loan early. Closing a home loan early in India is a financially prudent decision that can save you money on interest payments and provide you with peace of mind.

How to Close Home Loan Faster?

If you are wondering can I close home loan early, you can take to pay off your home loan ahead of schedule:

• Increase EMI: Consider increasing your Equated Monthly Installment (EMI) amount. Even a small increase can significantly reduce the loan tenure and overall interest paid.

• Make Lump-Sum Payments: Utilise any windfalls, such as bonuses, tax refunds, or inheritance, to make lump-sum payments towards your principal amount. This directly reduces the outstanding loan balance and interest payable.

• Instead of paying your EMI once a month, consider switching to bi-weekly payments. This results in 26 half-payments annually, which effectively amounts to 13 monthly payments. This strategy accelerates the repayment process and reduces interest costs.

• If interest rates have decreased since you took out your home loan, consider refinancing to a new loan with a lower interest rate. This can result in significant interest savings over the loan tenure.

• Most lenders in India allow borrowers to make prepayments towards their home loan without incurring penalties. Check your loan agreement for prepayment terms and conditions, including any fees or restrictions.

• Use online tools or calculators provided by banks to determine the impact of extra payments on your loan tenure and interest savings. This helps you strategize and optimize your prepayment efforts.

• If your existing lender does not offer favorable prepayment terms or interest rates, consider transferring your outstanding loan amount to another lender offering better terms. This can include lower interest rates and more flexible prepayment options.

• Keep track of your loan repayment progress by reviewing your loan statements regularly. This allows you to assess the impact of prepayments on the outstanding balance and adjust your strategy accordingly.

• Consult with a financial advisor or mortgage expert to evaluate your options and devise a personalized strategy for closing your home loan early. They can provide insights and recommendations tailored to your financial situation and goals.

This is all about how to close the home loan early.

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What is the process of closing home loan?

 

When you apply for a home loan, you are in for a long haul. So long that it may take 25 to 30 years for you to repay the home loan. But there are times when you try to repay the loan quickly because your financial circumstances have changed for the better. If you are wondering how to close home loan early, I can share a few tips with you on the same. Read through and tell me if these tips help you. Go for a shorter loan tenure The first thing which comes to my mind is to opt for a shorter loan tenure. You can perhaps apply for a home loan for 10 or 15 years. However, if the loan tenure is shorter then the repayment amount will be a little higher. Go for home loan balance transfer You can choose to transfer your home loan to another bank which offers a lower interest rate and accordingly you can choose the loan tenure which is shorter than the earlier loan arrangement. A new lender may offer you a top up loan which can help you repay the home loan quickly. Find out how to transfer home loan from one bank to another Prepay your home loan Whenever you have surplus funds, you can choose to prepay your home loan to reduce the burden of home loan from your shoulders. It is advisable to indulge in this activity occasionally. There are nominal pre payment charges levied by the banks for pre payment of loan. These are the top 3 ways in my opinion on how to close home loan early. I also made use of NoBroker's Loan Eligibility checker to keep a check on how much loan I could get in future. You can check it out too. [widget_emi_calci]