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Want to save on interest and reduce the repayment term of your LIC home loan? Prepaying is the answer. The LIC home loan prepayment calculator allows you to see the impact of your prepayments instantly, enabling you to make better financial decisions.
This guide covers everything you need to know about the LIC prepayment calculator, including how it works, how to use it, and how prepayments can benefit you. With expert guidance from Credit Dharma, you’ll be able to plan and manage your home loan repayments effectively.
Save Lakhs on Your LIC Home Loan with Prepayments!
Why Prepay Your LIC Home Loan?
Prepayment is a financial strategy where you repay a portion of your home loan ahead of schedule. This simple step comes with a host of benefits:
| 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. |
Imagine owning your home outright years ahead of schedule—that’s the power of prepayment!
LIC Home Loan Prepayment Charges
| Bank | Preclosure Charges | Prepayment Charges |
|---|---|---|
| LIC Housing Finance Limited | Nil to 2% of the prepaid loan amount | Nil to 2% of the prepaid loan amount |
Factors to Consider Before Prepaying a LIC HFL Home Loan
While prepaying home loans seems lucrative, borrowers must evaluate certain aspects beforehand:
Things to Know Before Prepaying Your LIC Home Loan
Before using the LIC home loan prepayment calculator, keep these points in mind:
| Factor | Description |
|---|---|
| Prepayment Charges | 1. Check if your loan agreement includes prepayment penalties. 2. Many loans have no charges for prepaying. |
| Liquidity Matters | 1. Ensure prepayment doesn’t leave you short of emergency funds. 2. Maintain a healthy balance between savings and prepayments. |
| Frequency of Prepayments | Decide whether to make one-time prepayments or regular lump sums based on your cash flow. |
Pro Tip: If your credit score is low, consider working on it for 3-6 months before applying for a home loan.
How Credit Dharma’s Home Loan Prepayment Calculator Works
The LIC 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.
Here’s a step-by-step guide to use Credit Dharma’s LIC Home Loan Prepayment Calculator
- Enter Loan DetailsInput your loan amount, interest rate, and tenure.
- Add EMI DataSpecify the number of EMIs you’ve already paid.
- Input Prepayment AmountEnter the amount you’re planning to prepay.
- CalculateHit 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!
How to Prepay Your LIC Home Loan?
Learn how to prepay your LIC Home Loan here:
- Check Your Finances:
Ensure you have enough savings for other expenses and emergencies before deciding to prepay.
- Log into the Customer Portal
Visit the LIC HFL customer portal and log in with your credentials. If you don’t have an account yet, you can register using your loan account number and other details
- Select Prepayment Option
Once logged in, navigate to the loan section and choose whether to make a partial or full prepayment
- Make the payment
After selecting the loan account and amount, proceed to the payment gateway to complete the prepayment through net banking, UPI, or other available methods
- Verify Loan Details
After the payment, you can check your updated loan balance and new EMI schedule online through the portal
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Home Loan Foreclosure Charges by Top Banks
Not all lenders follow the same policy for foreclosure charges. Here’s a list of charges levied by some of the major financial institutions in India.
| Lender | Foreclosure Charges (Floating Loan) | Foreclosure Charges (Fixed Loan) |
|---|---|---|
| SBI | Nil | Nil |
| HDFC | Nil | Up to 2% of outstanding principal |
| ICICI Bank | Nil | 2% on principal (for non-individuals) |
| Kotak Mahindra Bank | Nil | Nil |
| LIC Housing Finance | Nil | Up to 2% of prepaid amount |
| Axis Bank | Nil | Nil |
| PNB Housing Finance | Nil (individuals) | 2% of prepaid amount (non-individuals) |
| Yes Bank | Nil (floating loans) | 4% of outstanding amount (fixed) |
| IDBI Bank | Nil | Nil |
| Bank of Baroda | Nil | Nil |
| TATA Capital | Nil (when paid with own funds) | 2% to 5% (when refinanced) |
| Sammaan Capital | Nil | Nil |
Conclusion
Prepaying home loans substantially reduces interest costs over long tenures. LIC HFL offers exceptional prepayment options for borrowers to determine potential savings on their housing loans.
Looking for expert guidance on your home loan journey? Choose Credit Dharma for all your home loan needs, from application to repayment. We’re here to assist you in making informed decisions, optimizing prepayment amounts, and strategizing for maximum savings.
Frequently Asked Questions
LIC Housing Finance generally allows any amount of prepayment without charges on floating rate home loans. For fixed rate loans, conditions may apply, so it’s best to refer to your loan agreement or contact LIC directly.
The reduction in EMI after a prepayment depends on whether you choose to lower the EMI or shorten the loan tenure. If you opt to decrease the EMI, the amount of reduction will depend on the remaining tenure and the prepayment amount.
Most lenders allow significant prepayments for floating rate home loans without any charges. However, fixed rate loans might have restrictions or penalties. The exact terms can vary, so checking your specific loan agreement is advisable.
To close a home loan early with LIC, you can make a full prepayment of the outstanding balance. It’s recommended to notify LIC in advance, prepare the necessary funds, and follow up with them to complete any required formalities to ensure the loan is closed properly.
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.
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