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​What is Home Loan Repayment?

Home Loan repayment, also known as Home Loan foreclosure, is when a borrower repays the full outstanding loan amount in a single payment instead of opting for EMIs. It is part of the Home Loan process wherein the borrower can pay off the loan before the expiry of the tenor. In such cases, one can choose the total number of EMIs paid for and the month when the loan amount is to be closed. Usually, the repayment tenor of a Home Loan expands up to 40 years in the form of small, affordable EMIs as per the amortization schedule of the lender. For first-time borrowers wondering what home repayment is, what are the different types, and how to repay the amount, here are all the details.

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Repayment of Housing Loan – What are the Different Options?

While financial institutions and banks determine the housing loan repayment schedule in most cases, the borrower can make certain changes as per convenience and financial needs. For example – one may either choose to pay the EMI in small installments throughout the length of the tenor, or pay a higher EMI to pay off the entire amount way before the expiry of the loan tenor. Borrowers can pick from the following Home Loan repayment methods.

Step-Up Repayment

For this type of repayment option, the EMI amount increases as the tenor extends. In other words, the borrower pays lesser EMI during the initial years of loan repayment and a larger EMI as the tenor progresses. This type of repayment option is best suited for freshers or newbies in the market since they are unlikely to have enough funds to pay off the EMIs during the start of their careers.

Step-Down Repayment

Contradictory to the previous one, the Step-down repayment option involves an eventual decrease in the housing loan EMI with the extension of the tenor. This is suitable for borrowers nearing retirement age since paying off a hefty EMI is easier when one has a steady source of income.

EMI Holiday

Some lenders offer an exclusive EMI holiday at the beginning of the repayment schedule to delay the EMI deduction from the bank account by a couple of months following the loan disbursal.

Lump-Sum Repayment

This is a great option for borrowers looking to settle the loan amount immediately. In the case of a housing loan, the total amount is disbursed in installments wherein the borrower only pays interest on the loan amount till the disbursal of the final installment. The EMIs are payable following the complete disbursal of the housing loan. Nevertheless, if the borrower chooses to pay off the principal at the earliest, they can also pay the EMIs on the disbursal cumulative account.


Housing loan refinancing involves paying off the outstanding balance of the current Home Loan by availing of a new one at affordable interest rates for a shorter period.

Balloon Repayment

This option works along the same lines as the lump sum repayment but the borrower has to make a larger payment as the third and last installment. The tenor is usually taken for a shorter period. A small part of the housing loan principal balance is amortized over time.


Prepayment is a good option for those who have surplus funds in hand and are willing to repay the amount completely or partially. However, some lenders do charge a penalty for housing loan prepayments.

*Terms and conditions apply.

Home Loan Repayment Charges ​

Home Loan Repayment Charges

To give readers a clearer idea of what a repayment plan might look like, with the assumption that the interest rate on a Home Loan is fixed at 8.60% p.a., we have provided calculations below. Please note that these calculations are only indicative, and actuals will depend on numerous things, including your tenor, and loan amount.

​​​Loan Amount ​​ ​​​ Tenor ​​ ​​​ EMI Amount ​​
Rs.10 Lakh ​​​40 years ​​ Rs.7,331
Rs.10 Lakh ​​​30 years ​​ Rs.7,689
Rs.10 Lakh ​​​20 years ​​ Rs.8,678
Rs.10 Lakh ​​​10 years ​​ Rs.12,399

Frequently Asked Questions_WC

Frequently Asked Questions

​​The Home Loan repayment schedule is the EMI payment plan that is given to borrows by the lender. The schedule details the payment plan down to each month, till the end maturity of the loan.

​​​The foreclosure month is the month in which you are able to repay your full Home Loan amount.​

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