Home Loan: If you want to get rid of the loan, then these 4 methods of prepayment will come in handy..
Whenever RBI reduces the repo rate, it also affects your loan. RBI has not made any change in the repo rate for a long time. At the same time, during a recent program, RBI Governor Shaktikanta Das indicated that there is little hope of a cut in the repo rate shortly. In such a situation, if you are waiting for the interest rates of home loans to come down, then it would be better if you try to end the home loan instead. Here know the way through which you can end the home loan soon.
This is how the home loan will end soon.
The way to reduce the burden of debt or end it completely is prepayment. Through this, you can repay your home loan partially or fully. Most banks allow prepayment of home loans. There are 4 ways to make prepayment which can be useful for you. If you are also planning to make a prepayment, then know about these 4 ways in the slides below-
First way - Start with a small amount and increase it gradually
According to the information given on the website of the Bank of Baroda, one way to prepay a home loan is to start prepaying with a small amount and keep increasing this amount at a fixed rate every year. For this, you will have to save a little every year. You can make a prepayment with this amount of savings.
Second way - Make a prepayment with a fixed amount
You can also reduce your principal by paying a fixed amount every year. You plan your expenses for the whole year and make a prepayment by giving a fixed amount every year. This will reduce your principal amount rapidly and your loan will reduce rapidly.
Third way - Increase EMI
One way to reduce your principal amount through prepayment is to pay more than your calculated EMI. You will have to do this every month. This method is also very helpful in getting rid of the debt burden quickly.
Fourth method - Pay off the loan in full
If your financial condition has improved and your financial status is good now, then you can pay the entire amount of the home loan in one go before the tenure is over. However, you may have to pay a penalty for paying off the home loan in full.
