What is Home Loan Foreclosure?
Home Loan foreclosure refers to the full prepayment of the Home Loan balance in one go, thereby closing your loan before the end of the repayment tenor.
You may consider foreclosing your loan to save on your interest outgo. This can allow you to take on new investments or even a second Home Loan.
Home Loan Foreclosure: Charges and Fees
Individual borrowers with floating interest rate Home Loans can foreclose their home loan at zero additional costs.
However, entities or individuals with a fixed interest Home Loan can be charged an additional fee upon foreclosing their Home Loans, which can range up to 4%*.
Features of Home Loan Foreclosure Calculator
The Home Loan Foreclosure Calculator helps you estimate how much you can save by foreclosing your Home Loan while keeping your current repayment conditions in mind.
Fill in the following details:
- The total Home Loan principal amount
- The current Home Loan interest rate
- Your repayment tenor
- The number of EMI payments made to date
The calculator then provides you with the total foreclosure amount and the amount you can possibly save as Home Loan interest.
The online calculator saves you from manual calculations and provides you with instant results based on the information given.
Home Loan Foreclosure Process: Step by Step
The following steps are usually involved when the borrower chooses to foreclose their Home Loan.
Step 1: Contacting the Lender
Before you proceed to initiate the foreclosure, borrowers are advised to contact with their lenders and understand the right steps.
Step 2: Foreclosure Application
A written application citing the loan reference number and other details should be submitted to the lender so that they can draw up the necessary paperwork for the foreclosure.
Step 3: Complete Payment
Upon receiving confirmation from your lender, you can finish repaying your outstanding Home Loan balance and notify your lender of the same.
Step 4: Receipt of Foreclosure
After receiving your outstanding dues, the lender will release all your documents in their possession, such as your Title Deed and other property-related documents.
Borrowers should ensure that they also receive a NOC and a Home Loan foreclosure letter, confirming that no more dues remain.
Bajaj Housing Finance issues the foreclosure letter 21 days after receiving the foreclosure request.
*Terms and conditions apply
Home Loan Foreclosure Calculator: FAQs
Foreclosing your Home Loan can have a positive impact on your credit score, provided you have made timely EMI payments and cleared all outstanding dues. Also, when you foreclose a loan, the lender updates the status as ‘closed’ which positively impacts your credit report.
Individual borrowers with floating interest rate Home Loans can also foreclose their loan at zero additional costs. However, entities or individuals with a fixed interest Home Loan will have to pay an additional fee upon foreclosing their Home Loans, which can range up to 4%*.
Your application can be turned down if you don't follow the lender's prepayment terms and conditions.
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