What is a Home Loan Repayment Schedule?

A home loan repayment schedule or amortisation schedule is the schedule of payment of EMIs to the lender. It stipulates the amount that you will be paying to the bank/NBFC every month till the maturity of the loan.

What are the tax benefits of home loan repayment?

You can claim a tax deduction of up to ₹1.5 Lakhs on the principal repayment portion of the EMI under Section 80(C) of the Income Tax Act and a deduction of up to ₹ 2 Lakhs on the interest portion of the EMI under the Section 24(B) of the IT Act.

How to withdraw PF for home loan repayment?

You can withdraw up to 90% of your PF corpus for home loan repayment. PF withdrawal is a simple process and can be completed either online or offline. To withdraw your PF online, you need to visit the official UAN website, log in with your credentials, navigate to the “Online Services” page and proceed with the withdrawal process. To withdraw your PF offline, you need to first download the withdrawal form from the EPFO website, fill in the details and submit it to your nearest EPFO office.

What is a foreclosure month?

The foreclosure month is the month in the loan tenure in which you choose to repay the entire outstanding loan amount to the lender.

What is the interest amount saved on a foreclosure?

The interest amount saved on foreclosure is the additional amount that you would have to pay to the lender as interest had you repaid your house loan online as per the regular amortisation schedule.

Home Loan Repayment

Learn more about the different home loan repayment options

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Home loan repayment is when the borrower repays the loaned amount to the lender, along with the interest charged. A home loan is usually repaid over a period of 10 to 40 years in EMIs (Equated Monthly Instalments) as per the amortisation schedule decided by the lender.

Home Loan Repayment Schedule

When you repay a home loan, you do not repay just the amount you borrowed, but also the interest charged by the lender. While the rate of interest varies from lender to lender, it is also determined by numerous other factors such as your credit score, monthly income, other liabilities, and more.

If you wish to repay the loan through a standard monthly repayment schedule, the example below will help you understand how the repayment works.

Example: Let’s say you take a home loan of ₹10 Lakhs with an interest rate of 6.5% p.a. for a tenure of 5 years. Now, you will have to pay a fraction of the principal amount and a fraction of the interest amount every month as per the amortisation schedule (EMI schedule) decided by the bank.

The following table illustrates how much of the principal amount and the interest amount you will be paying to the bank every year:

Tenure	Principal Amount	Interest	Balance Amount
Year 1	₹1,68,296	₹45,138	₹8,31,702
Year 2	₹2,37,513	₹47,067	₹5,94,190
Year 3	₹2,53,418	₹31,162	₹3,40,772
Year 4	₹2,70,392	₹14,188	₹70,381
Year 5	₹70,381	₹764	₹0

Ways to Repay Your Home Loan

Aside from the regular monthly repayment schedule, there are other ways to repay your loan. In most cases, you are allowed to make some changes to your repayment schedule as per your financial needs and convenience.

For example, you may choose to repay your entire loan much before the scheduled date or pay a higher EMI at the beginning or towards the end of the loan tenure. Following are some of the home loan repayment options that you should know about:

EMI Holiday

Some home loan providers offer an EMI holiday at the start of your home loan repayment. This EMI holiday is nothing but a delay in the deduction of EMI from your bank account by a few months after the disbursal of the home loan.

For example, a 3-month EMI holiday would allow a borrower to start paying instalments after 3 months of availing the loan.

Step-Up Repayment

A Step-Up Repayment option involves an eventual increase in the EMI amount as the loan tenure progresses. This means that during the initial years of repaying your home loan, you will have to pay a lower EMI, and the amount will increase as the loan tenure progresses.

Step-Down Repayment

Step-down repayment is the opposite of step-up repayment. Here, the borrower sees an eventual decrease in the EMI amount as the loan tenure progresses.

This means that during the initial years of the repayment of the housing loan, you will have to pay a higher EMI. However, the amount will eventually decrease as the loan tenure progresses.

Balloon Repayment

In this case of a Balloon repayment option, the borrower makes a large payment (around one-third of the loan amount) as the last instalment. A balloon loan is ideally taken for a shorter term, where the final balloon payments tend to be almost twice the size of the initial instalments.

In this loan repayment option, a small portion of the home loan’s principal balance gets amortised over time.

Refinancing

Refinancing a home loan involves repaying the outstanding balance of the existing home loan by availing a new loan. This new loan generally comes with a lower home loan interest rate and better repayment options, so that the borrower’s repayment capacity is not hampered. A borrower can also negotiate a shorter tenure on the new loan for refinancing.

Prepayment

If you have surplus funds at any point of time during the loan tenure, you may choose to repay your home loan (either in part or in full) before the completion of the tenure. Prepayment of a home loan helps lower the EMI of the loan significantly. However, certain home loan providers levy a penalty for prepayment.

Research these methods thoroughly prior to opting for a repayment option. Make sure that the option supports your financial requirements and monthly expenses.

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Government Schemes

A home loan repayment schedule or amortisation schedule is the determined timeline of EMI payments. It stipulates the amount that you will be paying to the bank/NBFC every month till the maturity of the loan.

You can claim a tax deduction of up to ₹1.5 Lakhs on the principal repayment portion of the EMI under Section 80(C) of the Income Tax Act, 1961. Also, a deduction of up to ₹ 2 Lakhs on the interest portion of the EMI under the Section 24(B) of the I-T Act.

A home loan provisional interest certificate is proof of payment of loan EMIs by the borrower. The certificate has the summary of all the EMIs paid by the borrower indicating the principal and the interest components of the EMI separately.

The foreclosure month is the month in which you choose to repay the entire outstanding loan amount, prior to the end of the loan tenure.