Home loan part-prepayment FAQs
Prepayment refers to the early repayment of a loan. It is an instalment payment before its due date and is usually a lump sum amount. The minimum sum required to initiate the prepayment of your home loan with Bajaj Finserv is the equivalent of three of your EMIs. Since you pay a part of your dues before times, a prepayment can result in a reduced tenor or a reduction in your EMI amount.
The Home Loan Part-Prepayment Calculator is a tool that shows the positive impact of early repayment of your loan.
All you need to do is simply enter your loan details and then enter the amount you wish to pre-pay. Do keep in mind that this amount will have to be at least three times the calculated EMI.
You can move the sliders to your left or right to adjust the values or you can directly type the values for the following:
- The loan amounts
- Tenor (In months)
- Rate Of interest
- The part pre-payment amount that you wish to pay
After you enter these details, click “Done”. You will be able to see two options:
- EMI saved: This table shows the reduction in your EMI and monthly savings in EMI post part pre-payment
- Tenor saved: This table shows the reduction in your tenor post part pre-payment.
Home loan prepayment comes with several benefits, such as reduced outstanding, reduced tenor, and smaller EMIs. In the long run, prepayments help you become debt-free earlier, which ultimately impacts your CIBIL Score positively.
When you prepay a part of your home loan, you have two options. You can either have your lender shorten the tenor, in which case you roughly pay the same amount as EMI, or you can continue with the same tenor, in which case your EMIs reduce.
It depends on the type of home loan interest rate. For example, Individuals with a floating interest rate home loan pay no extra charges on prepayment or foreclosure. On the other hand, fixed interest rate home loans attract a nominal fee on prepayment or foreclosure.