The partial payment of the home loan decreases the total tenure of the existing loan and EMI. You can do as per your financial needs. When you get any unexpected payment or bonus you have the provision to pay off partial payment of the home loan. A person repays the loan to reduce financial liabilities. A partial payment is done in two ways either pay a lump sum amount or pay in periodic intervals over a month.
The SBI home loan repayment calculator is used to understand the amount you manage to save by reducing your tenure. This will make clear the table that how much you save during this process. If you want to reduce the EMI after partial payment, you have to speak to the bank.
Benefits of home loan prepayment calculator
When you opt for part payment of a home loan, then the principal amount will be lower automatically. The remaining principal amount reduced in lower interest & EMI reduce eventually. A part payment opted for at the right time would reduce the liabilities. The SBI home loan part payment calculator allows a borrower to decide the profitability of the advance payment that they make against the home loan liability.
This Part-payment of a home loan improves the credit score of the borrower. The selection of the prepayment would make easier principal repayment and check the interest accurately. The borrowers can also show the overall saving that can be done with the help of the SBI home loan prepayment calculator.
The borrower should have a lump sum amount to pay the part payment. The part payment amount should be three times the monthly EMI.
How to use a home loan prepayment calculator
First of all, enter your loan details and the amount which you want to repay. The amount should be three times at least the calculated EMI.
There are sliders you can move left or right to adjust the value or you can type the value manually.
The part payment amount you wish to pay
After entering these details you should click done then two options come up:
EMI saved: This EMI table shows the reduction in EMI and monthly savings in EMI post-pre-payment.
Tenor saved: This tenor table shows the reduction of your tenor post-part pre-payment.
What is a home loan part-prepayment calculator?
A home loan part prepayment calculator is an online tool to help borrowers allow the suitability of the pre-payment options. To know the pre-payment savings, enter a few essential details, i.e. the loan amount, interest rate, tenor, and the part prepayment amount.
The total savings from SBI home loan prepayment would base on the tenure, the prepayment amount & the installments already paid.
If you have an existing SBI home loan is 20 lakhs, the actual loan tenure is 10 years, the rate of interest is 10%, the number of installments paid is 40 and if the prepayment amount is 1 lakh, then you ultimately save the interest of Rest. 92,576 in the process.
The SBI home loan prepayment calculator is as much accurate as it would provide you with an accurately calculated figure. The conclusion of this rest of, prepayment is the best option during the initial years of the loan.
Things to Consider Before Making Home Loan Prepayment
The money which you save for future financial goals never use for the home loan prepayment.
You should choose between the EMI reduction and loan tenure.
Don’t use emergency funds for making your home loan prepayment.
Evaluate the savings and compare them all through the SBI home loan prepayment calculator.
You should fetch the returns from the present investment.
Is there Prepayment Charge on SBI Home Loan?
The cases when banks and HFCs are allowed to charge prepayment penalties as per RBI guidelines:
The banks and HFCs are allowed to charge in prepayment if the borrower is not an individual.
If the loan rate is fixed the penalty charge by the bank.
If the borrower will take a loan from another bank or HFC for making repayment the HFCs will charge a penalty on fixed-rate loans.
What is the best time to make SBI home loan prepayment?
The best time to pay prepayment of SBI home is an initial year. If you are financially stable then you can pay or you will get a bonus or unexpected payment. Prepayment of Home loans is reducing financial liabilities.
Can I reduce my SBI home loan EMI by paying a prepayment?
Home loan prepayment: if there is an opportunity to prepay part of the SBI home loan before the tenure of the loan is completed, then the interest will reduce on overall payments. If a principal amount will be lower the interest rate and EMI payment will be low. Prepayment improves the credit score. For prepayment, the amount should be in a lump sum and three times more than the monthly EMI.