Part Payment Limit on a Home Loan: A simple guide

The part payment limit on a home loan is the amount a borrower can pay towards the outstanding principal in addition to regular EMIs, subject to the lender’s applicable terms. There is no universal percentage or fixed amount applicable to every home loan, as lenders may set conditions based on the loan agreement, repayment terms, and applicable policy. These conditions may include minimum or maximum amount for each part payment, limits on how frequently payments can be made, and applicable charges or other requirements. Before making a part payment, check whether the amount will be adjusted directly against the principal and whether you can choose between reducing your EMI or shortening the loan tenure. For floating-rate loans, applicable regulatory provisions may also affect prepayment or part-payment charges. RBI directions provide for part or full prepayment of loans, subject to applicable instructions and conditions.

How does part payment affect your home loan burden?

A home loan part payment reduces the outstanding principal, which can lower the interest payable over the remaining loan period. Once the payment is credited and adjusted according to the applicable loan terms, the reduced principal can lower the interest calculated on the remaining balance. The effect on your EMI or loan tenure depends on the repayment option available for your loan account.

The suitable repayment option depends on your financial priorities and the options available for your loan account. A lower EMI may help manage monthly cash flow, while reducing the tenure may help repay the loan sooner and potentially reduce the overall interest payable.

Making a home loan part payment through an authorised digital channel allows you to pay towards the outstanding principal in addition to your regular EMI. Before proceeding, review the amount payable, applicable terms, and available payment options for your loan account.

Follow these steps:

1. Log in to the Bajaj Finance Customer Portal using your registered mobile number and OTP.
2. Go to Service and select Relations to view your active loan accounts.
3. Select the relevant home loan account number.
4. Click on Make loan payments, and select Part-prepayment.
5. Enter the amount you wish to pay and review the applicable charges and terms.
6. Select an available payment method and click Pay now to complete the transaction.
7. Save the payment acknowledgement or transaction receipt for your records.
8. Check your loan account or statement after the payment is processed to verify the updated outstanding balance.

After completing the part payment, retain the transaction acknowledgement and review your updated loan statement. This helps you confirm that the payment has been recorded and understand the revised outstanding balance. If you have overdue dues or a legal notice, verify the remaining amount payable and account status through an authorised channel. 

What should you check before making a home loan part payment?

Checking your loan terms before making a part payment helps you understand the amount you can pay and how the payment will affect your repayment schedule. Review your latest loan statement and applicable terms before transferring funds. The exact treatment of a part payment depends on the lender's process and the terms applicable to your loan.

Check these details:

1. Outstanding principal: Know the current principal balance before deciding the amount to pay.
2. Permitted part payment amount: Confirm whether a minimum or maximum amount applies.
3. Payment frequency: Check whether there is a limit on how often part payments can be made.
4. Applicable charges: Verify any charges that may apply to your specific loan before making the payment.
5. Revised repayment schedule: Confirm whether the part payment will change the EMI, tenure, or both.
6. Payment acknowledgement: Keep the transaction confirmation and updated loan statement for your records.

RBI rules prohibit banks from charging foreclosure charges or prepayment penalties on floating-rate home loans in specified circumstances, while the applicable terms can differ for other loan structures. The relevant loan agreement and lender terms should therefore be checked before payment.

Is there a minimum amount for home loan part payment?

The minimum amount for a home loan part payment depends on the lender's terms and the conditions applicable to your loan account. There is no single minimum amount that applies to every home loan. Some lenders may specify a minimum amount for each part payment or set conditions on how frequently you can make such payments. Before initiating a part payment, check your loan agreement, applicable terms and the payment options available for your account. Also confirm whether any charges or other conditions apply to the proposed payment. The amount you pay may affect your outstanding principal and, depending on the available repayment options, your EMI or remaining tenure. If your loan account has overdue dues or you have received a legal notice, confirm the amount required and how the payment will be adjusted before making a part payment. This helps you understand the remaining dues and account status.