Overview
Owning a home is a necessity of one’s life, but still, it is a hard task for many of us; even those people who are doing good in their life find it difficult to purchase the home of their dreams. Acquiring a home loan comes with a cost called Home loan interest rate, which sometimes becomes very costly.
People often fail to repay the amount borrowed due to heavy cost involved. Don’t worry from now as OneNDF ensures the lowest home loan interest rate with easy repayment tenure and 5x faster credit disbursal. Using their free Home loan EMI calculator, one can check their eligibility before applying and also learn ways to improve the same.
During the last few days, we have witnessed various cases of Home loan defaulters and insolvents who failed to repay the borrowed amount. For us, it is a concerning issue that should be rectified with proper information of repayment ways and enough cash in hand. People fail due to lack of knowledge and low ability to return the amount.
It is always advised to check the amount using a Home loan calculator. Borrow amount only if you have 100% surety of returning it. Considering this as a valuable insight, today we’ll be sharing knowledge on “Home Loan repayment options” available to us. Keep reading!
Free Home Loan EMI calculator!
7 Best Home Loan Repayment options
Following below are the best possible ways to make Home Loan Repayment easier and faster than ever.
Step Down repayment plan.
Step down repayment plan or flexible repayment plan is designed in a different way where the EMI payable amount will decrease as the loan comes near to maturity date. As the loan progresses, one has to pay comparatively less amount paid in the beginning years of the loan repayment. In simple terms, the EMI amount will be high in the beginning years and will be reduced in later years.
Generally, those borrowers who are near to their retirement will be seen preferring this repayment option, as they have comparatively more money when they are employed.
When children and parents buy property jointly, they opt for a step-down repayment plan as both are combined to avail of long-term loans. It is because parents are close to their retirement and childrens have just started earning.
Delayed EMI payments
The delayed EMI payment option is a much-suggested scheme for those borrowers who don’t have enough amount to start repayment in the initial years of the loan borrowed. This option allows one to start repayment later in their tenure.
Lump Sum Payment
Those people who have purchased under-construction property are generally required to serve the interest rate on the borrowed amount till final disbursement. EMI payment start after that period. In case if one wishes to start the principal amount repayment on an immediate basis, then the option remains the same. One can start repayment on cumulative amounts disbursed. The repaid amount will first settle the interest rate, then the principal repayment.
Balloon payment
The balloon payment is best for those who have very high financial needs. It involves a lump sum payment in respect of a loan in a predetermined interval, say 4 years or maybe at the last stage of a long-term loan. Balloon payment happens when home loan borrowers repay about one-third of the amount in the last installments.
Step Up repayment plan
Step-up repayment plan is the near opposite of a step-down repayment plan. It is a method in which the EMI starts increasing after a few initial years and will be less in the beginning of the tenure. In case you need this repayment plan, consider HDFC's step-up repayment facility or else one can consider ICICI Bank’s step-up Home loans.
People who have less salaries in the beginning but carry the potential of increased salaries take this repayment option and acquire a high amount for home loans. If you are the one who has the possibility of having a higher income in the near future, this is a suitable plan for you.
Must Read: Best Banks for Home Loans in India
Fixed & Flexible amount payment
Fixed and Flexible repayment options are two of the most common forms of repayment of the credit borrowed. Under the fixed repayment option, the EMI amount is fixed for the whole tenure. EMIs will not get affected by market conditions and will always remain constant. A fixed rate is best for those borrowers who carry the possibility increased interest amount with upcoming times.
On the other hand, in the flexible repayment option amount is not fixed and will totally depend on market fluctuations and other related factors. The EMI repayment amount is not always the same; the amount may increase or decrease. While signing the agreement, read the provision of interest rate and sign only if you are agreed.
Refinancing
Lending institutions will refinance the borrower on the same property as a top-up, based on the current market value of the property amount, only after the registry. This will eventually come with the lowest Home loan interest rate and flexible repayment options. One can also negotiate for a shorter tenure on a new loan for refinancing; it is nothing but a home loan balance transfer.
Closing statements
Due to the increase in repayment failures and default cases in home loans, it gets extremely important to prevent failure in repayment. As discussed earlier, a Home is a basic need of every individual. The possibility of acquiring a home loan will increase, and so will the cases of defaults and repayment failures.
To avoid all these unpleasant events, we have analysed all the possible ways to repay Home loans discussing the best possible plans. If you are facing difficulty in repayment, do consider all these measures discussed above and find best suited way to get out of it. In case you are looking for a Home loan where interest rate is comparatively low, consider OneNDF for it; I am sure you’ll be satisfied taking it.
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FAQs
Q.1 What is the most common repayment of loans?
Standard payments are considered best when it comes to home loans. It means regular payments at the same amount till the maturity date.
Q.2 Does a Housing loan come under 80CC?
As per 80CC of the Income Tax Act, the maximum allowed deduction for the repayment of the principal amount of a Home loan is INR 1.5 lakhs.
Q.3 Can I repay the full home loan early?
Yes, lending institutions allow both full and partial prepayment of a home loan.
Q.4 How many years is the Home loan repayment?
A home loan allows a maximum tenure of 30 years.
Q.5 How does a home loan calculator work?
It is a tool that calculates how much the mortgage payment will cost you over time.
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