Want to Prepay Your Kotak Mahindra Bank Home Loan? Here Is What You Should Do

Want to Prepay Your Kotak Mahindra Bank Home Loan? Here Is What You Should Do

Accumulating debt is not at all considered to be good because it can adversely affect your long term financial health. It is through home loan prepayment facilities offered by all home loan lenders, including Kotak Mahindra Bank Home loan that lowers the EMI burden of the home loan borrowers. By opting for the home loan prepayment option, borrowers can lower their interest burden that further assists to lower the entire borrowing cost.

Basically, the Kotak home loan prepayment or prepayment option offered by other home loan lenders refers to the medium of repaying the home loan before the repayment tenure period. This can be performed in both ways, either completely or partially. Hence when one prepays their home loan, their EMI reduces. In place of choosing the reduction in your EMI, you can even choose a reduction in repayment tenure option when you opt for Kotak home loan prepayment or prepayment option offered by other home loan lenders. To know the optimum prepayment amount, you can take the help of the Kotak home loan EMI calculator for prepayment.

When should you opt for the home loan repayment option?

It is always better to opt for the home loan prepayment option just when you have surplus funds with you. For instance, you can opt for it when you avail your bonus amount through your organization or when any of your investments mature. Remember that a home loan is a loan, which demands a long term commitment. Hence borrowers require paying a lot on their interest amount, which enhances the entire borrowing cost. Thus, prepaying the Kotak home loan or home loan availed through other lenders early saves the amount that you otherwise would have repaid as an interest amount.

Let us try to understand it better through an example: Suppose you took a home loan that has a rate of interest of 8.35 % p.a., and you took up 80 % of the home value in the form of a home loan, which equates to Rs 50 lakh. Thus, towards the end of the loan repayment tenure, which is of twenty years, you will require repaying Rs 50 lakh plus the interest component, i.e. 50 lakh plus 52.21 lakh = Rs 1.02 crore approximately.

Thus, when you prepay the home loan with a sum of Rs 2 lakh towards the end of 3 years, the amount that you save on the interest component is Rs 5 lakh. You may even choose to lower the loan repayment tenure by eighteen months.

The above-given calculation is sufficient enough to make you understand the power that home loan prepayment holds.

How can you prepay your Kotak home loan or home loan availed through other lenders?

Seeing the benefit that Kotak home loan or other home loan prepayment holds, you should be wondering how you can go for it? Well, prepayment can be started with a small surplus amount, which gradually can be enhanced as doing so would assist you to observe the benefits and will even motivate you for the future.


​Opting for a home loan is nothing but a huge commitment that lasts for about ten to thirty years in India. So, it would be a better idea if you make an effort to save some amount after repaying your home loan EMI. On combining your month on month savings, you can easily use it to prepay the same towards your Kotak home loan or home loan availed through other lenders. Doing so would not just lower your payable EMI, but it would even lower your home loan repayment tenure. If you prepay towards your home loan more than once, you surely can save a lot on your home loan interest cost.

Enhance home loan EMI and lower the repayment tenure

If you are not able to gather funds via savings, you still can prepay the home loan before the repayment tenure. Are you wondering how? Well, it can be simply done by increasing your month on month instalments, i.e. your Kotak home loan EMI or home loan EMI of other home loan lenders. For instance, a home loan borroweKotak Mahindra Bank Home Loanr takes up a home loan amount of Rs 50 lakh for a home loan repayment tenure of twenty years. As per this, he requires repaying Rs 40,000 in the form of a home loan EMI. Now, if the home loan borrower continues to make repayment of the same home loan EMI for twenty years, he actually would end up paying an amount equivalent to 50.21 lakh as an interest amount. Here, the overall payable interest component can get reduced by enhancing the monthly payable amount towards EMI. Now, if the home loan borrower repays Rs 50,000 in place of repaying Rs 40,000, the loan would end fast and also, it would save the borrower a lot on the interest outgo amount.

Ensure to set your financial goals and not solely concentrate on home loan prepayment

While making prepayment towards your home loan helps to render you with peace of mind as well as saves you a lot on the interest cost, you cannot afford to avoid another crucial long term as well as short term goals. Besides working towards accumulating the amount for your home loan prepayment, you even require setting your crucial financial goals like accumulation of corpus for your child’s higher education or marriage, post-retirement life, down payment creation for a home loan and car loan etc. Setting financial goals as well as working towards achieving them not just provides you with peace of mind but also helps you attain your important goals on time when required. Most importantly, your financial goal acts as a road map to guide you towards your end target. Ensure that concentrating just on home loan prepayment is not at all a good decision as it consumes your sufficient time and ends up in saving less for your other crucial and important financial goals, which are more important than the home loan prepayment option.

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