Buying a house is the biggest financial decision of our life. Most of us take home loans to buy a house. And the annoying part about home loans is the interest and tenure. But there is always that option to prepay your home loan and get rid of the excess load of paying home loan every month. There are many innovative ways to save the money you earn and prepay your home loan before your tenure ends. Prepaying means paying the outstanding home loan early to save on your interest rates. But there are different views about the question is prepayment of home loan beneficial. Let me briefly explain is it beneficial to prepay home loan.
Get home loans at the lowest interest rate through NoBrokerIs home loan prepayment beneficial?
When you prepay your home loan the interest is calculated on the principal amount you are yet to pay. If you prepay your home loan you can reduce the interest component of your home loan.
Therefore, you may prepay your home loan depending on your financial condition. You can prepay your home loan with a windfall or a bonus. Banks and NBFC do not charge you a fee as prepayment penalty. So, it is definitely a wise decision.
If you are prepaying your home loan with your savings you should prepay when your home loan tenure is about to be completed. Prepaying a home loan early can be challenging since the outstanding amount is high and the outstanding amount interest rate is calculated. So, three or four years before your tenure ends you can prepay your home loan.
Home loan helps to save on your taxes. You can get a tax exemption for up to Rs. 2 lakh if you take a home loan. So, keep that in mind before prepaying your home loan.
I hope you know is prepayment of home loan beneficial or not.
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Authors Of The Question
Is Prepayment of Home Loan Beneficial?
Armaan
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1 Year
2023-01-02T11:29:50+00:00 2023-01-02T11:29:51+00:00Comment
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