Home loans are a popular credit option for individuals who want to fund the purchase of a residential property of their choice. Since buying a house requires a lump sum investment, home loans act as a suitable source of financial assistance due to their high-value advance amount. Besides, these loans are secured by the residential property itself, which suggests that this credit option provides scope for attractive interest rates.
As a result, individuals experience a reduction in the financial burden during repayment. Besides, they can use a home loan preclosure calculator to gather the necessary data related to the total repayment amount and the interest payable. Now, let’s consider a few repayment options to understand how effectively you can pay back the advance to your lender.
The most suitable home loan repayment options and their working
Individuals managing their housing loan can have several repayment options and techniques depending on the lender chosen. Consequently, these options and opportunities enable a person to lower their financial obligations with convenience. In this way, they can manage their personal finances efficiently while tapping the scope for saving on repayment liability.
Some Home Loan Repayment Options:
- Repayment through increased EMI – Individuals can request their concerned Housing Finance Company (HFC) to increase their monthly EMI amount. It is one of the most effective techniques to reduce the financial liability of an individual. In this way, individuals can pay off their home loan amount along with the accumulating interest earlier than the tenor. With this, they do not have to pay an excess interest throughout the stipulated period of the home loan.
Therefore, individuals should opt for this advantageous option in case their income receives an increase. They should also use a home loan preclosure calculator to gauge an estimate of the interest payable and the EMI amount. Due to the benefits of calculating EMIs before taking a home loan, individuals can make informed decisions regarding the repayment schedule and efficient management of finances.
- Repayment through longer tenor – HFCs also allows individuals to opt for longer tenors while servicing their home loans. Even though the aggregate interest amount increases by a narrow margin, they can pay off their outstanding dues comfortably. Plus, including plans for longer tenor in the repayment schedule helps a person accommodate other financial needs. Therefore, they can channelize their finances in directions along with home loan EMI payment. Besides, this repayment option is most beneficial for individuals who avail of home loans early. In this method, they can secure a way to repay the rest of the principal and interest component conveniently.
- Part prepayment – Individuals also have the option to opt for part prepayment facilities from their housing credit lenders. This method enables them to settle a portion of their home loan amount earlier than the pre-decided tenor. As a result, they can clear off their outstanding home loan dues earlier and reduce the overall interest payment. Besides, it also helps them save significantly on interest payments, which, in turn, reduces their long-term financial burden.
In addition, individuals can also clear off the entire housing debt through the foreclosure facility. It enables them to sever their repayment obligations early in life.
Leading HFCs also offer home loans up to Rs.5 crore, making it easy for borrowers to purchase their dream home. Individuals can also benefit from lower prepayment charges on these loans. With several options to decrease home loan interest, they can further ease their repayment burden.
Certain HFCs also provide pre-approved offers on several secured financial products including home loans and loans against property. These offers can substantially reduce the time required for successful loan approval. You can also check your pre-approved offer just by providing your name and contact details.
Moreover, home loan preclosure calculator is an important instrument while deciding which option to choose for credit repayment. These tools additionally act as a financial navigation system that enables a person to settle for the most suitable and economically healthy repayment process.