How to clear loan faster

[Kalyan]

How to clear loan faster

Tips to move loan into a lower interest rate scheme to complete repayment faster.

Everyone is talking about big interest rate cuts on home loans. But Sanjay was unhappy with his lender. His rates were brought down by 0.5 per cent over the past couple of months. This was an insignificant reduction compared to the hikes that were passed on to him.

His loan tenure had almost doubled. Sanjay is a worried man. He wouldn't be able to retire early as his debt on the home will still remain. What if he was unable to work or was unemployed at the end of 20 long years? Would the roof be snatched away from his family? Wasn't there a way he could pay a lesser rate of interest like other new borrowers?

courtesy : economic times

[Kalyan]

Switching the lender appeared to be an expensive proposition for Sanjay. The prepayment penalty he owed the current lender was high. The lender charged processing and other legal fees. The cost of switching appeared to be more expensive than the benefit of reduced rates. Was there a possibility of enjoying reduced rates on par with new customers? Yes.And it comes with a conversion fee.

Some banks have recently offered their existing customers, reduced rates at a small fee. The fee is usually a percentage of the loan outstanding. The bank treats the loan as closed and provides the borrower with a new set of home loan document and application form. Certain pages on this document need to be franked at the sub-registrar's office by paying a small fee. This money is meant to go into the government kitty.

courtesy : economic times

[Kalyan]

Other necessary documents include copy of PAN, copy of passport and passport size photograph. Fill in personal details, income information and bank details. In case of a co-applicant, these documents and details are also required for both the applicant and the co-applicant.

Both the applicant and co-applicant are required to sign on pages of the home loan documents. Borrower needs to submit three cheques totalling the outstanding loan amount due. There may be slight variations in procedures from lender to lender.

courtesy : economic times

[Kalyan]

Sanjay now has a dilemma. Should he reduce his tenure or his monthly EMI dues?

Sanjay's outstanding loan amount: Rs 20 lakhs Rate of interest: 13 percent Tenure: 20 years (240 months) Monthly EMI: Rs 23,432 He pays a conversion fee of two percent of loan outstanding, which amounts to Rs 12,000. At a rate of 11 percent, his tenure can be adjusted to 167 months.

Or, his monthly EMI outflow can be brought down to Rs 20,644. If Sanjay wants to retire early,it is in his best interest to bring down his loan tenure. This way he can clear debts faster. For a small conversion fee, grab the opportunity to enjoy lower rates.

courtesy : economic times

[pradeep prem]

while get loan easily this
but while paying the show us double interest