With increased government initiatives to boost the residential real estate sector, housing credits are expected to register double-digit growth figures over the coming years. It is ideally coupled with the escalated affordability of the citizens to purchase residential spaces owing to incentives like the PMAY. A crucial role is also played by financial institutions across India who offer their housing financing options at affordable rates. Following this trend, Q4 FY19 witnessed a housing loan growth to approx 10% on a YoY basis and 3.5% on a QoQ basis.
While secured advances in the form of home loans help borrowers meet the monetary requirements, availing it is a crucial decision. Home loans are long-term secured loans and most individuals avail only one such loan throughout their lifetime. Also, thanks to the increased competition amongst various NBFCs, borrowers now have the advantage of enjoying multiple benefits like prepayment of home loans.
Add-on features like prepayment facilities enable borrowers to repay the loan flexibly according to their current financial standing. In case borrowers happen to come across a lump sum amount, they can approach their lender and prepay a part of the EMI. While this has significant benefits, lenders offer a home loan EMI calculator with prepayment that helps borrowers gauge the impact of this part prepayment.
Benefits of Prepayment Calculator
While availing home loans can help borrowers fund the purchase of their homes, choosing a suitable home loan and lender can help one avail an option to foreclose or prepayment of the home loan as per their current financial standing.
With reputed financial lenders like Bajaj Finserv, availing their Home Loan comes with the add-on benefits of part prepayment at minimum or no charges.
Under this, borrowers can prepay an amount higher than the stipulated EMI in case they come across substantial funding. Prepayment will lead to either of the following changes to the loan terms –
- Reduction of EMI, or
- Reduction in the tenor of a loan
Prepaying an amount that is greater than three EMIs results in a substantial impact on the credit score of borrowers. It reflects increased credibility of borrowers to avail yet another financial assistance shortly.
They also offer their existing borrowers with a benefit to avail pre-approved offers that ease the application process to avail financial assistance. These offers are available on numerous financial products that include home loans, business loans, personal advances, etc. You can take a look at your pre-approved offer by providing a couple of essential details.
With the home loan prepayment calculator from this lender in question, one can have the added benefit of saving Lakhs on their home loan considering that it –
- Helps one calculate the suitable amount of prepayment
With prepayment, the aim is to lower EMIs or tenor so that the financial burden established during a repayment process is reduced substantially. With a prepayment calculator, borrowers can change their prepayment amount to decide upon an amount that would yield the most benefits or help avoid the highest amount of interest. - Helps to choose between a reduction of EMI or loan tenor
Considering that prepayment options are provided for the benefit of the borrower, it is ideally essential to choose between either reducing the home loan tenor or EMIs. It is where the home loan prepayment calculator comes to use considering that it helps calculate the exact option that would fetch a borrower maximum financial benefits.
Borrowers can choose between either to reduce EMIs or the tenor, whichever helps them towards a better financial margin. The calculator can help easily compute multiple prepayment amounts and resultant tenor or EMIs to help you come to a feasible conclusion. - Provides an amortization table
This financial tool comes equipped with the amortization table that can be referred to for a complete idea on the interest to be paid as per the part prepayment amount and the resultant changes to the loan tenor or the EMI. The amortization schedule is vital to calculate a profitable outcome.
Such beneficial features of this loan calculator make it a preferred option for the potential borrowers. It also assists them in their endeavor to choose the best home loan that requires minimum home loan fees and charges and save considerably on the same.