Nowadays, home loan lenders like PNB home loans, along with providing lower PNB home loan interest rates, even provide customized repayment options as per the borrower’s requirement. Few of the customized options provide flexibility in reference to loan repayment, while others get linked with different stages of home construction. Overall, such plans are to provide benefits to lenders and borrowers. Few of these customized repayment plans can also enhance the borrower’s repayment capacity as well as cater to tax benefits.
A home loan with delayed EMI repayment option
Home loan having the option of delayed EMI repayments is a prudent choice for those borrowers who may face difficulty in repaying the home loan EMIs of PNB home loans or other lenders right from the beginning of the repayment loan tenure. This specific home loan option provides home loan borrowers to start their home loan repayment of PNB home loan or other lenders later. Besides PNB home loan, this option is also provided by the State Bank of India in the form of Flexi pay, where the home loan borrower does not require to make home loan repayment between 36 and 60 months. The period is called the moratorium phase wherein the borrower of home loan do not require repaying their EMI. However, they require repaying the pre-agreed interest rate amount.
Step down repayment option
Step down repayment option is called a flexible instalment plan also. The plan gets structured in a manner wherein the EMI amount that is payable for a home loan decreases with the progress in a home loan. It means that in starting years, the instalment repayments, i.e. the home loan EMIs, would be high, and it will slowly reduce in later years. The plan utilizes the theory of reducing the balance to determine the EMI in distinct repayment stages. This kind of repayment plan is good for the ones who are nearing retirement. It is because, with this plan, the borrower can repay high EMIs in the initial years when they are employed or they are earning more amount, and then in later stages, the home loan EMI will reduce at the time when they have less income or will retire. This kind of repayment option is even suitable for those who purchase property with their parents or kids.
Step up repayment option
Step up repayment option gets structured in a manner where the EMI of home loans continues to increase after the initial years. It means that in the starting years, the home loan EMI will be less, which will increase after some time. For this option on a home loan, you can consider the PNB home loan step-up option, HDFC step-up repayment option or ICICI step-up home loans.
In such loan types, you can take up higher home loan amounts and repay lower EMIs in the initial years. But the repayments will get accelerated with an increase in repayment tenure. This repayment option is excellent for those who have the guarantee of earning a higher income in a few years or in the near future.
Home loan having lump sum repayment
On buying a property, which is under construction phase, borrowers usually are required to serve just the interest component on the home loan amount. After this period is over, EMIs are payable. In case those want to begin principal repayment immediately, they have the choice to begin repaying the EMI on the cumulative amount disbursed. Amount repaid first gets adjusted against the interest component paid. The balance amount then goes towards principal repayment.
As per the balloon repayment option, home loan borrowers repay 1/3rd of the home loan amount in the last instalments. Balloon repayment includes lumpsum repayment towards home loan in predetermined intervals such as 5 years or at the ending stages of long term home loan tenure. This option is recommended for only those with high financial requirements. It must be avoided as borrowers require paying more interest as compared to any other plan or scheme.
Flexible and fixed instalment plan
As per the fixed repayment option, the EMI gets fixed for a specific period or for the entire loan tenure. In case it is fixed for a specific time period, EMI gets adjusted after this period according to the market rate. In the course of fixed repayment tenure, home loan EMI is not impacted by the market conditions, and it stays the same. The fixed-rate instalment option is advantageous for the borrowers when rates are expected to increase in the upcoming future. However, home loan borrower requires to be aware when signing a loan agreement because few of the lenders in the agreement get the provision to increase the fixed amount at the fixed time.
Contrary to this, the flexible home loan repayment plan is where the EMIs are not the same and differs with fluctuations in the market. The loan EMIs of PNB home loan in case of flexible home loan repayment option rises or falls based on the market value.
A home loan with an EMI waiver
This repayment option is available in the case of Axis Bank in the form of a fast forward home loan. As per this scheme, twelve EMIs can get waived off if the rest of the instalments are repaid on a regular basis. In such a scheme, 6 EMIs are waived off on completing ten years and another six months on the completion of fifteen years. As per this option, the loan repayment tenure requires being of twenty years and a minimum loan amount of Rs 30 lakh. There are various options under which you can repay your home loan. Borrowers can select their home loan along with payment options wisely based on their conditions. However, at times there are few individuals who miss out on such opportunities because they are unaware of such options. Thus, as a home loan borrower, ensure to select your repayment options in a wise manner to save and avoid any unwanted situations.