Home Loan: Home loan has made it easy to buy a house, but sometimes its monthly EMI starts to seem heavy. Lack of correct information often forces people to make mistakes when they want to repay the loan before time. Due to this they suffer losses. Therefore, it is important to keep some important things in mind while repaying the home loan. By paying attention to these 5 things, you can avoid the loss during early payment.

Banks and NBFCs providing home loans provide their customers the facility to repay the loan on time. Financial institutions have different terms for this. However, sometimes there are some 'hidden charges' terms in them, and many such, due to which you do not get any benefit of repaying the home loan before time.

Keep these five things in mind before closing the home loan-

If you are going to close the home loan, then keep these five things in mind…

There should be no foreclosure fee-

Closing the home loan before time is called 'foreclosure.' According to the rules of the Reserve Bank of India, foreclosure fees cannot be charged on home loans at floating rates. If your loan has a variable interest rate, then there will be no penalty on pre-mature closing. However, a foreclosure fee of 4 to 5 percent will have to be paid on fixed-rate home loans. Thus, the fee is calculated based on the type of loan.

Inform the bank-

Although it is not mandatory, whenever you are going to repay your home loan before time, then inform your bank or NBFC 2 to 3 weeks in advance.

Take a No Objection Certificate-

If you have closed your home loan on time, then you should obtain a 'No Objection Certificate' (NOC) from your bank or NBFC for this. Otherwise, it will continue to appear as a liability in your CIBIL score and will spoil your score.

Get the mortgage status cancelled-

When you close your home loan before time, get all its papers from the bank and also get its ‘mortgage’ status cancelled. This will not cause you any problem in selling your property later.

Get the original papers-

It has been seen many times that people close their home loan before time, but they do not get the original papers of the house from the bank. You have to ensure that you get the original papers of the house along with closing the home loan.

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