How do I make a partial payment for a home loan (LIC HFL)?

Question:

How do I make a partial payment for a home loan (LIC HFL)?

Home loan:

Home loan or housing loan is the process of borrowing money from a bank or financial institution to purchase a house. Home loans are attached a variable or fixed interest rate and defined tenure. Comparing to other retail loans home loan is considered as cheap because of lower interest rate because of the nature of loan.Generally financial institutions usually maintain a certain hair cut of the market value of the property to sanction the loan amount.

Answer and Explanation:

Home loan prepayment is allowed in India for borrowers to reduce the burden on borrowing. There is no prepayment charge is applicable in such case.

One can use the following options in prepayment of housing loan in LICHUF:

  1. Full Pre-payment
  2. Partial pre-payment.

In partial prepayment the borrower can put some extra money in between to reduce the quantum of liability,Partial payments on the home loan bring down the principal amount which can be effected by reducing the EMI or reducing the outstanding tenure.


Learn more about this topic:

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Buying a House: Mortgage Types & Loan Length

from Finance 102: Personal Finance

Chapter 7 / Lesson 4
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