Borrowers trying to clear their home loan repayments faster can follow any of these options discussed below according to their convenience.

  • Part-prepayment: Financial institutions offering home loans usually allow their customers to pay a lump-sum amount of money to clear a portion of their existing debt. Known as part-prepayment, this enables borrowers to reduce their outstanding credit amount substantially, thereby allowing them to clear their loans faster. Typically, pre-payments are permitted after a borrower has paid a specific number of EMIs.

  • Foreclosure: Similar to part-prepayment in the fact that this also includes a lump-sum payment, any individual can also clear their complete home loan repayment amount with a single payment. Known as foreclosure, this completely clears the existing debt of a borrower. Similar to part-prepayment, one can opt for this facility only after he/she has cleared a fixed number of EMIs.

  • Balance transfer: Borrowers can also transfer their existing home loan balance to a different financial institution to avail of better rates of interest. This allows them to renegotiate tenor, effectively clearing a more substantial portion of their existing debt in shorter spans.

Home loans are financial products that borrowers repay over a long duration of time and, therefore, include a considerable amount of interest. Consequently, reducing the repayment tenor of home loans usually decrease the total cost of loans significantly. Borrowers should look for opportunities to clear such debts at the earliest to alleviate their repayment burden effectively.

Also Read: Know How Use of Home Prepayment Calculator Can Save You a Ton of Money