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Home Loan Prepayment

 

Purchasing a home was a critical decision, especially with the assistance of a home loan. The outright purchase of a home without the help of home finance in India almost never occurs. Exceptionally good projects or homes are affordable with the help of a home loan. With the convenience of easy EMI options, loan tenure, tax benefits and flexible repayment facilities, there is no wonder home loans are a preferred option to buying a home outright. At Tata Capital, our home loan facilities are:

  • Easy EMI options
  • Guaranteed Tax benefits
  • Convenience in determining loan periods
  • Convenient Prepayment options
  • Flexible Repayment Tenure

When you decide to apply for a home loan, perhaps the most important point of consideration is the EMI you would be able to pay. You would decide this based on your current salary level. To arrive at your loan budget, you also need to consider the amount you need to meet your other monthly expenses, after paying EMI.

 

Most people in the modern workforce receive at least one salary increment every couple of years. You may want to pay an additional amount as prepayment over and above your EMI to complete your loan repayment sooner.

 

Many banks have taken cognizance of this fact, and now offer a prepayment system. Using this, you could opt to pay a monthly amount in addition to the EMI payment. The monthly withdrawal of this amount could also be linked to your salary account, to continue with the same convenience of payment as available for EMI.

 

Prepayment of your home loan results in a deduction of the outstanding principal on your loan. It's often an ideal situation when one can prepay a loan component before the term period of the loan.

 

Benefits of prepayment:

 

TATA Capital provides for home loans at excellent interest rates and our prepayment options do not have any penalty on partial prepayment up to a maximum of 25% of principal outstanding in a year. Our flexible repayment option allow one to repay the loan amount without too many hassles or and help you optimize on your monthly outgo. The best aspects of your home loan repayment are the ability to reduce the amount of loan to be repaid and the tenure for repayment.

 

While home loan interest rate remains the single-most important criterion for selecting your home loan, it is important for homebuyers to realize that it is not the only one. Some of the other factors that could make a considerable difference to your choice include:

 

Refinancing also helps you to use your home equity, the difference between the property value and the balance loan amount, to generate wealth. This can be done through investments in other property, shares or managed funds.

 

It is important to choose a loan that fulfills all your requirements, but also offers you the best deal. This means that it should be affordable and customizable; you should be able to choose the loan amount and tenure according to your convenience.

 

Homebuyers need to remain aware of all the options in the home loan arena, as they might come across attractive options like prepayment even after they have started paying off their loan. If they don't keep track of new developments with the idea that they have already completed all the formalities of the loan, they would not be able to take advantage of such options.

  • Prepayment of a home loan allows you to cut short your loan tenure significantly.
  • The bank might also offer the added convenience of withdrawal of this surplus amount from your loan amount if you need it for an emergency. If you opt for this, it might overshadow the advantage of having paid the additional amount.
    • Fixed or floating rate of interest
    • Policies about early closure and foreclosure charges
    • Eligibility based on your salary
    • Prepayment system
    • Home value assessment policies
    • Policies related to co-application

Looking for a Home Loan? Calculate your EMI in 3 Easy Steps Using our Home Loan EMI Calculator.

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Important Information

Recently there have been cases of fraud being committed under the name of Tata Capital or Tata Finance. Customers are requested to read the attached advisory and be aware of misleading advertisements in the newspapers. Click here to read the advisory and be aware of misleading advertisements in the newspapers.

Click here to read the advisory

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