Things to Do When Closing a Home Loan
Getting rid of a home loan prematurely is indeed a matter of happiness. Your curiosity increases when you are free from the burden of monthly installments (EMI).
In fact, the Reserve Bank has made provisions for not levying additional charges and penalties for prepayment of all types of floating rate term home loans, which are applicable to all borrowers and have recently been implemented,
This provision encourages prepayment of the home loan taken from the bank. Due to this, the rate of interest on a home loan does not increase quickly; it remains stable.
There are a few things you should keep in mind before prematurely closing a home loan account:
1. Make sure that all the original documents are in your hands.
When the home loan is disbursed, almost all the basic documents that are very important for an individual, like the title deed, indemnity bond, and letter of guarantee, come with the lender.
Apart from this, other important documents also have to be given to the bank.
So, when you are completely free from the burden of a home loan, then get all those original documents from the bank, because after the loan agreement is over with you, the banks do not have the right to keep your original documents even for an hour.
2. The final amount may be slightly higher than you expected.
Banks charge a little more than your estimate in the final payment, which is the amount of interest charged on the final settlement check, which takes a day or two to clear.
Thus, the final payment amount will be slightly higher than what you anticipate.
3. Get a closure certificate.
bank to give you a “closure certificate” or “no-objection certificate,” in which it is certified that you have no outstanding loan to the bank or any housing finance company and that you have deposited all the outstanding installments of the loan.
4. Security check.
The bank asks you to submit a security check before sanctioning the home loan. In most cases, the number of security checks is two or three.
When you have repaid the entire home loan, take back the security check from the bank.
5. Final payment.
It would be a good idea to sit in front of the concerned officer when he is calculating the final payment settlement and see if the amount to be paid is getting inflated. The good news is that these days there are no prepayment charges.
Ask for Advice
Before closing your home loan account, you should take advice from experts. If you prepay the home loan, you may lose out on the income tax exemption given to you because when you prepay the entire home loan, there is no benefit of the income tax exemption on the home loan. Get.
When deciding to prepay the home loan, consider all the factors and be careful in this regard. Keep in mind that the bank will not care about you after they get their money back.
You have to run after him. Therefore, discuss with the people who have deposited the home loan ahead of time. Doing this will also ensure that the correct documents have come into your hands.
