Make home loan part payment in Bajaj Finance

Part payment for a home loan is an excellent strategy for reducing your overall loan burden by making additional payments towards the principal amount, apart from your regular EMIs. This option allows borrowers to either reduce their EMI amount or shorten their loan tenure, leading to significant savings in interest over time. Part prepayment can be particularly useful for those who receive a lump sum of money, such as a bonus or investment return, and wish to lower their debt faster. By effectively managing part payments, you can ease financial pressure, shorten your repayment period, and become debt-free sooner. Keeping track of your loan balance through a home loan statement helps you decide when to make part payments. Let's explore the benefits of part prepayment, how it affects your home loan, and the steps involved in making these payments.

Benefits of part prepayment

1. Interest savings: By paying off a portion of the principal amount early, you reduce the total interest paid over the loan tenure.

1. Reduced EMI or tenure: Part prepayment allows you to choose between reducing your monthly EMI or shortening the overall loan tenure.

1. Debt-free sooner: Regular part payments can help you close your home loan much earlier than the original tenure.

1. Improved credit score: Making part prepayments can positively impact your credit score, as it demonstrates your financial discipline and reduces the total outstanding debt.

1. Reduced financial stress: Lowering your loan balance through part payments can provide peace of mind by reducing the long-term financial burden.

1. No prepayment penalty: Many lenders do not charge a prepayment penalty on floating rate home loans, making it easier to make part payments without additional costs.

1. Increased financial flexibility: With a reduced loan balance, you have more flexibility in managing other financial goals.

How part prepayment affects your home loan?

Part prepayment can have a significant impact on your home loan by reducing both the interest and the loan tenure. When you make a part prepayment, the additional amount is directly applied to the outstanding principal, which lowers the principal on which interest is calculated. This reduction in the principal leads to lower overall interest payments throughout the remainder of the loan. Borrowers can choose whether to reduce their monthly EMI or shorten the loan tenure based on their financial goals. If you choose to reduce the EMI, your monthly payments will be smaller, allowing more disposable income for other expenses. On the other hand, opting to reduce the tenure means paying off the loan faster, leading to significant interest savings. It’s essential to check your home loan statement to monitor your outstanding balance and understand how part prepayment will affect your loan.

When and how to make part payments?

1. Check loan eligibility: Ensure that your lender allows part payments, as some loan agreements may have restrictions or conditions.

1. Timing of payment: Ideally, make part payments early in the loan tenure to maximize interest savings, as interest is higher in the initial years.

1. Use bonuses or windfalls: Consider using bonuses, investment returns, or any lump-sum income to make part payments and reduce your loan burden.

1. Consult your lender: Contact your lender to understand the process, any possible charges, and the impact of part payment on your loan.

1. Make payments online: Use the lender’s online portal, such as loan part prepayment, to conveniently make part payments.

1. Choose between EMI or tenure reduction: After making a part payment, decide whether to reduce your EMI or shorten your loan tenure based on your financial preferences.

1. Track loan balance: Regularly monitor your home loan details to stay updated on your outstanding balance and future payments.

Required documentation for part payment

1. Loan account number: Provide your loan account details to the lender for the transaction.

1. Identity proof: Carry a valid ID proof, such as an Aadhaar card or passport.

1. Payment receipts: Keep receipts of any prior payments for reference.

1. Part payment form: Some lenders may require you to fill out a part payment request form.

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