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Home Loans: paying off 11.25% int on loan amount 34 Lakhs.have 10 lakh extra cash

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    • CommentAuthorvikramc
    • CommentTimeJul 5th 2008
     
    • Answers: 1
    • Joined: Jul 5th 2008
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    paying off 11.25% int on loan amount 34 Lakhs.have 10 lakh extra cash. There is a 2% penalty on prepayment. Is it advisable to pay off the loan
    • CommentAuthorLoan Guru
    • CommentTimeJul 24th 2008
     
    • Answers: 13
    • Joined: Jan 20th 2008
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    Save on prepayment charges by making partial pre-payments. Quite a few banks do not charge pre-payment penalty if the loan is prepaid partially. The definition of what constitutes partial pre-payment varies from bank to bank. You can make enough pre-payment to ensure that you still need to pay a few more EMIs (normally 12) to completely clear off the loan. This will ensure savings in pre-payment penalty and at the same time help you to save on high interest costs on a substantial portion of the loan

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