Pre-closing of Home Loan
Easy access to a home loan in today’s time has opened paths for buyers from all segments to get their dream homes like Panchkula Flats 3bhk. However, it does put the financial burden on the borrower due to the long tenure along with the extra amount to be repaid. So the question arises whether it is a wise decision to repay the home earlier than the set duration? Pre-closing of the home loan not only puts off the financial ease but also helps the borrower to save on the extra loan amount.
What is the Pre-closing of a Home Loan?
The pre-closing of home loan is the early repayment of the loan than the earlier set tenure. The borrower can repay the half or full loan earlier than the pre-decided tenure to save the money that the borrower was supposed to pay for interest. While it is a debatable topic whether to invest the money in some other asset class instead of early repayment of home loan, it depends on the borrower’s choice. If easing off the financial burden is the goal, then it is advisable to pay off the loan and save on the extra interest amount.
If you are planning to go for pre-closing of your home loan then below are a few of the things that you need to ensure while doing the same.
Recovery of original documents- Once you have cleared your debt and paid the home loan amount in full then get your original document released from the bank i.e. the documents that you must have submitted while applying for a loan like Sale deed, Conveyance Deed, and possession letter.
No Objection Certificate- Once you prepay your loan, the bank will share the duly signed and stamped acknowledgment along with the No Objection Certificate (NOC). Ensure that the NOC consists of all the mandatory details like your name, address, date of closing of the loan, etc.
Encumbrance certificate- You need to apply for the Encumbrance certificate as the final document for the pre-payment of the home loan. The document consists of all the financial transaction details related to the concerned property. Closing of home loan is reflected in this document and you can apply for it in the Registrar office after receiving the No Objection Certificate. CIBIL score-After the process is completed, it’s time to update your CIBIL score. Follow up with the bank to send the details of home repayment in full to the authorities for the final update in your CIBIL score. Since it depicts your creditworthiness and future prospects of lending money, this step is important and requires regular follow-ups.
What is the Pre-closing of a Home Loan?
The pre-closing of home loan is the early repayment of the loan than the earlier set tenure. The borrower can repay the half or full loan earlier than the pre-decided tenure to save the money that the borrower was supposed to pay for interest. While it is a debatable topic whether to invest the money in some other asset class instead of early repayment of home loan, it depends on the borrower’s choice. If easing off the financial burden is the goal, then it is advisable to pay off the loan and save on the extra interest amount.
If you are planning to go for pre-closing of your home loan then below are a few of the things that you need to ensure while doing the same.
Recovery of original documents- Once you have cleared your debt and paid the home loan amount in full then get your original document released from the bank i.e. the documents that you must have submitted while applying for a loan like Sale deed, Conveyance Deed, and possession letter.
No Objection Certificate- Once you prepay your loan, the bank will share the duly signed and stamped acknowledgment along with the No Objection Certificate (NOC). Ensure that the NOC consists of all the mandatory details like your name, address, date of closing of the loan, etc.
Encumbrance certificate- You need to apply for the Encumbrance certificate as the final document for the pre-payment of the home loan. The document consists of all the financial transaction details related to the concerned property. Closing of home loan is reflected in this document and you can apply for it in the Registrar office after receiving the No Objection Certificate. CIBIL score-After the process is completed, it’s time to update your CIBIL score. Follow up with the bank to send the details of home repayment in full to the authorities for the final update in your CIBIL score. Since it depicts your creditworthiness and future prospects of lending money, this step is important and requires regular follow-ups.
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