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Top 7 Things to Keep in Mind When Prepaying Your Home Loan

By Finserv MARKETS - Jun 3,2019
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Top 7 things to keep in mind when opting for Home Loan Prepayment

Home Loan is the key way of aiding people to buy a home. Though they can prove to be very helpful, they come at the cost of monthly EMIs, which absorb a part of your income during the whole loan tenure. As after a point, people are eager to prepay the loan whenever they get an opportunity. Consider few important things about home loan makes you burden-free and you finally get the complete ownership of your home. The property documents also get transferred from the borrower to the lender. There are a list of documents that you should keep in mind before closing the loan. Those documents are as follows:

  • Collecting all the original documents from the borrower
  • No Objection Certificate (NOC)
  • CIBIL Score
  • Make an Estimate for the Final Settlement
  • Get a Home Loan Statement
  • Encumbrance Certificate
  • Get Legal Clearance

Collecting all the original documents from the borrower

At the time of application of home loan, we keep all documents such as Mother Deed and Money Deed, Possession Letter, Power of Attorney and some posted dated cheques. It is important that we collect these documents when we are either transferring or closing the loan.

No Objection Certificate (NOC)

NOC is one of the main documents that you should collect from your lender. It is a certificate that states that your property is debt-free, and you have complete authority over the property. After an NOC has been issued that bank has no relation with the property. However, do check for the details like owner’s name, property description and the date of change of ownership.

CIBIL Score

CIBIL has an individual’s entire financial data. From active to closed loans, it has every detail. On closing the loan, tell the lender to update your CIBIL score as not updating might hamper your future chances of getting a loan. Since a CIBIL score is the deciding factor for getting a loan, it is important that it is up to date.

Make an Estimate for the Final Settlement

Before closing the loan, ask your lender about the estimate of the loan. You should be aware of the total amount that you are paying. Ensure that there no hidden charges except for the prepayment charge and you know the complete breakdown of the entire amount.

Get a Home Loan Statement

Once you pay the closing amount, collect the home loan statement. It has all the details of your repayment and EMI amount.

Encumbrance Certificate

An encumbrance certificate a copy that states the property being referred to is free from any financial and lawful liabilities. Also, that the property can be sold as a free title and the possession will come to you with no related things. An encumbrance certificate is to be collected from the registrar’s office and generally, lenders get it.

Get Legal Clearance

Though optional, it is advisable to get a clearance certificate from a lawyer. A clearance certificate ensures all formalities are completed from a legal standpoint. Also, if any issue arises a lawyer will be able to help you out better.

Pre-closing your loan is a dream for many. However, do not rush through it and do it when you’re ready close all the monetary and legal requirements.

Bajaj Finserv Home Loans have no hidden charges and are designed to meet your specific requirements. Apply for Home Loan with Finserv MARKETS, today!

Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522