Prepaying your home loan can be a strategic move to reduce your financial burden and save on interest costs. Axis Bank offers a Home Loan Prepayment Calculator to assist borrowers in understanding the potential benefits of making prepayments.
With the Axis Bank home loan prepayment calculator, you can instantly calculate how partial or full prepayments can significantly lower your debt burden. This tool helps you make informed decisions about managing your home loan effectively.
Save Lakhs on Your Axis Bank Home Loan with Prepayments!
Axis Bank Home Loan Prepayment Charges
| Type of Loan | Prepayment Charges |
|---|---|
| Floating Rate Loan (including part payment) | NIL |
| Fixed Rate Loan (including part payment) | 2% of outstanding principal / amount prepaid |
Here’s what you should know about Axis Bank home loans:
Prepayment Charges:
- Floating Rate Home Loans: Axis Bank does not levy prepayment charges on floating rate home loans, as per RBI guidelines.
- Fixed Rate Home Loans: A prepayment penalty of approximately 2% may be levied by Axis Bank on fixed-rate home loans.
Other Key Details:
- Loan Amount: Axis Bank offers home loans up to ₹5 crore.
- Loan Tenure: The loan tenure can extend up to 30 years.
- Interest Rates: Floating interest rates range from 8.75% to 9.15%, while fixed interest rates are around 14%. These rates are subject to the borrower’s credit assessment.
- Processing Fee: Up to 1% of the loan amount or ₹10,000 (whichever is higher) + GST. We collect an upfront fee of ₹5,000 plus GST at the time you submit your application.
- Other Charges: Home insurance is required for the loan tenure, and charges may apply for cheque dishonor, late payments, and changes to the loan term.
- Part Payment: Part payments are allowed at Axis Bank Loan Centers or Liability branches.
- Tax Benefits: Principal repayment qualifies for a deduction of up to ₹1.5 lakh under Section 80C. Interest payments offer a deduction of up to ₹2 lakh per annum under Section 24(b).
Source of Information: Pre-paying Your Home Loan, is it a Good Idea.
Why Prepay Your Axis Bank Home Loan?
Paying off your Axis Bank Home Loan early gives you the chance to become debt-free sooner and focus on other financial goals.
| Benefit | Description |
|---|---|
| Lower Interest Costs | By reducing your outstanding principal, prepayment directly slashes the total interest payable on your loan. |
| Shorter Tenure | Prepayments help cut down your loan tenure, allowing you to become debt-free faster. |
| Reduced EMIs | If you prefer, you can opt for lower EMIs while keeping the loan tenure constant. |
| Significant Savings | Depending on your loan amount and tenure, prepayment can save you lakhs of rupees over the loan’s lifetime. |
Suggest Read: Axis Bank Home Loan Top-Up
How to use Credit Dharma’s Home Loan Prepayment Calculator?
- Enter the loan amount, and interest rate, and specify the loan tenure.
- Enter the number of monthly installments (EMIs) you have already paid.
- Specify the amount you plan to prepay towards your home loan.
- The calculator will display the total interest saved and the reduction in your loan tenure or the number of EMIs remaining.
- Use the “Download Your Calculation Report” button to save a detailed report of the calculations.
Suggested Read: Home Loan Prepayment vs Investment
How Much Can You Save Using Axis Bank Home Loan Prepayment?
When you make a prepayment on your Axis Bank home loan—whether it’s a lump-sum amount or regular additional payments—you’re directly reducing your outstanding loan principal.
Since home loan interest is charged on the principal, bringing that principal down faster cuts the total interest you’ll pay over time and can also shorten your loan tenure.
Suggested Read: What is the minimum cibil score required to get a home loan from Axis Bank?
Example
| Aspects | Amount |
|---|---|
| Loan Amount | ₹50,00,000 |
| Rate of Interest | 9.00% p.a. |
| Tenure | 30 years |
| No. of EMIs Paid | 60 EMIs |
| Amount Prepaid | ₹5,00,000 |
Results
| Aspect | Amount |
|---|---|
| Outstanding Principal | ₹47,89,731 |
| EMI | ₹40,231 |
| No. of EMIs Remaining | 216 |
Read More: How to Download Axis Bank Home Loan Statement?
Factors to Consider Before Prepaying a Home Loan
While prepaying home loans seems lucrative, borrowers must evaluate certain aspects beforehand:
Check Out: Axis Bank Home Loan Customer Care
Cut down on interest, not your dreams—choose Axis Bank Home Loan Prepayment.
Conclusion
Becoming a homeowner is a dream—but paying for that home shouldn’t feel like a financial marathon. With the Axis Bank Home Loan Prepayment Calculator at your disposal, you can make well-informed payment decisions that keep your finances healthy and your dreams well within reach.
Frequently Asked Questions
Axis Bank may impose prepayment charges, particularly on fixed-rate home loans. The exact charges can vary, so it’s recommended to consult the specific terms of your loan agreement or contact the bank directly.
Rules for home loan prepayment typically allow borrowers to pay off their loan partially or fully before its maturity. While prepayments on floating-rate loans are generally free of charge, fixed-rate loans may have penalties. Always check your loan agreement for detailed rules.
Deciding between prepayment or continuing with a home loan depends on your financial situation. Prepayment can save on interest costs but may deplete your cash reserves. Consider your financial goals and consult with a financial advisor to make an informed decision.
When you prepay a home loan, the interest is recalculated on the new principal balance. This results in lower interest charges as the principal amount decreases, reducing the overall cost of the loan over time.
Yes, Axis Bank allows part-prepayments on home loans. For loans under a floating interest rate, there are no prepayment charges. However, for fixed-rate loans, a prepayment penalty of approximately 2% of the outstanding principal or the amount prepaid may be levied.
No, there are no prepayment charges for floating-rate home loans. This applies to both part-prepayments and full prepayments.
Axis Bank does not specify a limit on the number of part-prepayments for home loans under a floating interest rate. However, it’s advisable to confirm any such conditions with the bank directly.
Prepaying your home loan can impact the tax deductions you claim on both principal repayment (under Section 80C) and interest payments (under Section 24(b)). If the loan is paid off early, you may lose out on these deductions for the remaining tenure. It’s recommended to assess the tax implications before making prepayments.
Prepaying early in the loan tenure can lead to significant interest savings, as the interest component is higher during the initial years. Conversely, prepaying in the later stages of the loan results in comparatively lower interest savings.
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