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Home loan EMIs can often feel like a never-ending commitment, tying up your finances for decades. But what if you could fast-track your journey to debt freedom and save lakhs on interest? Axis Bank’s prepayment options, combined with Credit Dharma’s expert tools, make this a reality.
This blog dives into how you can reduce your home loan burden using Axis Bank Prepayment Calculator, along with a few smart strategies to optimize your savings.
Prepay now and save lakhs on your Axis Bank Home Loan!
Why Consider Prepaying Your Home Loan?
Prepaying your home loan involves paying off a portion of the principal amount before its scheduled due date. This proactive financial move offers several advantages:
- Reduced Interest Burden: Lowering the principal balance through prepayment decreases the overall interest you’ll pay on your loan.
- Faster Loan Closure: Prepayment can significantly shorten your loan tenure, helping you achieve financial freedom sooner.
- Lower Monthly EMIs: If you choose, prepayment can allow you to reduce your Equated Monthly Installments (EMIs) while maintaining the original loan duration.
- Substantial Long-Term Savings: Depending on your loan’s size and tenure, prepaying could save you a substantial amount in interest costs over time.
Take control of your finances and imagine the relief of owning your home outright, sooner than planned!
Axis Home Loan Prepayment Calculator
Navigating the complexities of home loan management can be a daunting task. This is where CreditDharma Home Loan Prepayment Calculator becomes an indispensable tool. It helps homeowners understand how prepayment can impact their loan’s tenure and the total interest payable. This blog will delve into the nuances of this calculator, ensuring you have all the information needed to make informed decisions.
Key Features Include:
| Key Features | Description |
|---|---|
| User-friendly interface | The calculator has a simple layout allowing fast calculations. |
| Personalized inputs | Borrowers can input their exact home loan details to get customized savings estimate. |
| Flexible options | Users can modify loan amount, tenure, interest rate as required to match their loan terms. |
| Detailed output | The calculator shows detailed breakup of regular EMIs, number of EMIs paid, pending EMIs, interest saved based on prepayment amount entered. |
How Credit Dharma’s Home Loan Prepayment Calculator Works
The Axis Home Loan Prepayment Calculator is a simple yet powerful tool designed to help you understand how prepayments impact your loan. With just a few inputs, it gives you clear insights into interest savings and tenure reduction.
How to Use It:
Here’s a step-by-step guide:
- Enter Loan Details: Input your loan amount, interest rate, and tenure.
- Add EMI Data: Specify the number of EMIs you’ve already paid.
- Input Prepayment Amount: Enter the amount you’re planning to prepay.
- Calculate: Hit the button to see your results instantly.
Example Scenario:
- Loan Amount: ₹1 crore
- Interest Rate: 9% p.a.
- Tenure: 20 years
- EMIs Paid: 12
- Prepayment Amount: ₹2 lakh
Calculator Output:
- Total Interest Saved: ₹8,47,731
- Tenure Reduction: 12 months
This simple prepayment saves lakhs and shaves a year off the loan tenure!
Factors to Consider Before Prepaying a Home Loan
While prepaying home loans seems lucrative, borrowers must evaluate certain aspects beforehand:
Benefits of Prepaying Your Housing Loans
Prepaying home loans using surplus funds carries multiple benefits:
- Lower interest outflow: Prepaying loans cuts down interest costs as outstanding principal declines faster.
- Shorter tenure: With every prepayment, loan tenure reduces, enabling faster debt freedom.
- Lower EMIs: Alternatively, borrowers can also opt to reduce EMIs while keeping tenure constant.
- Savings on total costs: Overall savings on a home loan can amount to several lakhs of rupees depending on the loan amount and tenure.
Is overdraft a better option than prepayment for you?
What is overdraft?
An overdraft facility means that surplus funds can be deposited in a home loan account, thereby reducing the outstanding principal and, consequently, the interest charged. The facility of an overdraft account is good because at any point, the person can withdraw that surplus money and use it in circumstances where funds are required.
So, the interest that one saves from the repayment of EMI benefits those who seek liquidity coupled with the ability to save on the cost of interest. But an overdraft facility may attract higher interest rates and some additional fees compared to standard loan terms.
Prepayment vs Overdraft: What Should You Opt For?
| Option | Features | Benefits | Good For |
|---|---|---|---|
| Prepayment | Directly reduces principal Saves on interest Potentially shortens loan tenure | Long-term interest savings Accelerates debt freedom | Borrowers seeking long-term savings and early debt clearance |
| Overdraft | Allows deposit and withdrawal of surplus funds Interest calculated on reduced principal | Flexibility in fund access Saves interest while funds are deposited | Borrowers needing liquidity and flexibility with continued savings |
Let’s slash your home loan’s tenure together!
Conclusion
Prepaying home loans substantially reduces interest outgo over long tenures. Axis Bank offers a stellar prepayment calculator that borrowers can easily utilize to determine possible savings on their housing loans. After considering key aspects, homeowners can decide suitable prepayment amounts and strategy to optimize savings.
Use Axis’s prepayment calculator today to accelerate your journey to debt-freedom! Feel free to reach out to our team of experts for any queries.
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.
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