Part-prepayment of my home loan


I have taken a home loan with SBI in 2012. I would like to make part prepayments to the loan account. How can I go ahead? Also, if I make part-prepayment, will it reduce my EMI?


You can make part-prepayments towards your loan account in the form of cheque payments. If you have savings account with the same bank you can give a standing instruction. SBI usually asks loan account holders to start a savings account with their bank for easy money transfers towards the loan EMI. You can transfer the amount you wish to pre-close to your SBI savings account and issue a cheque of that account against your loan account or give a standing instruction from your savings account towards the loan account. SBI will not take any penalty / charges for loan pre-payment / closure.

Once your cheque is realized / amount is credited in your loan account, you can approach the bank for restructuring your EMI. Most banks consider restructuring of loan tenure (reducing loan tenure) over restructuring of EMI in case of part-prepayment. But you can make a special request at the branch to consider revising EMI.


Hi Vichu,

Pre-paying your Home Loan is good for your Credit Score and will also reduce your EMI. You can use your funds to pre-pay your loan. It is best to not to go for loans like Personal Loans to prepay your other loans. Here’s an example of how prepaying your Home Loan will help.
You have a 20 year Home Loan for Rs. 60 lakh. 6 years have already gone by. You receive a Rs. 2 lakh bonus. Let’s say the interest rate is 9.5%. Assuming you have no other loans and are enjoying tax benefits on the loan, it makes sense to prepay your Home Loan. This is because you will save Rs. 7,50,948 of interest. Not only that, your Home Loan tenure will go down by 1 year and 6 months.

We would be able to give you exact details if you provide us with the loan amount, interest rate and the tenure.
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BB Expert