Prepayment

sushma (Querist) 20 August 2012 This query is : Resolved
dear sir,

i have taken home loan for 20years with emi of 50000 per month.
i want to know if i do prepayment of home loan in 10-15 years can my interest amount will get reduce?or is there any beenfit for prepayment.

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ajay sethi (Expert) 20 August 2012
on prepayment of part of loan your outstanding loan amount gets reduced . your interst liablity declines .

if you prepay entire laon in 15 years your liablity for payment of further interest on home loan ends .

Raj Kumar Makkad (Expert) 20 August 2012
Earlier there was instruction of RBI that if any loanee makes the payment of outstanding EMIs in advance, a penalty shall be imposed by concerned bank upon him but that instruction has been withdrawn now and it is upon you to make entire payment as earliest as possible and the calculation of the interest shall be made till the payment is made fully.

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