Tip 4: Be aware of the prepayment penalties applicable in your case. Often, customers are asked to sign loan documents with no mention of prepayment penalty.

Tip 5: Prepayment penalties are not written in stone. They are negotiable, and may even be waived if you have a good credit history.

Banks may ignore or reduce the penalty if interest rates climb after the loan has been disbursed, or the loan comes with a lower interest rate than the market rates.

Tip 6: Making partial prepayments is one way to save on charges. Some banks do not charge prepayment penalty if the loan is prepaid, partially. Of course, the definition of what constitutes partial prepayment varies from bank to bank.

As a thumb rule, make sure your prepayment amount is just enough that you still need to pay off a few more EMIs (usually 12), to clear the loan.

This not only saves on the penalty, it also helps you save on high interest costs on a substantial portion of the loan.

Calculate: The best home loan on offer

Apnaloan.com is an online guide for those who seek retail loans. Apnaloan also helps loan consumers to get best rates by making banks compete for their loan.

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e-mail: Harsh Roongta

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