I took a home loan of Rs2.7 lakh five years ago at an interest rate of 9.05% from a bank. The equated monthly instalments (EMIs) paid from my salary during this period (1 April 2009- January 2010) is Rs29,900, out of which Rs24,595 has become payable as interest for the fiscal 2009-10. My EMI was Rs2,400 earlier, but now I’ve increased it to Rs3,500. Please tell me how to close the loan in an economic way. How long will it take? —Suresh Sharma The best thing is to continue the loan because repayment of housing loan provides huge tax benefits. You can deploy your excess money to generate higher returns without taking much risk. However, if you still want to repay the loan faster, you could partly prepay it, keeping in mind the prepayment rules of the bank. Another way is to increase your equated monthly instalment (EMI) if you have surplus income month-on-month. However, you will have to produce your latest income statements based on which the bank will allow you to increase your EMI so that the loan is repaid faster.
My brother took a home loan three years ago but now he is permanently shifting to Canada. Can I get the loan transferred in my name?
From your question, it is unclear why you want to get the loan transferred in your name. Even if your brother moves to Canada, he can continue paying the EMIs through his non-resident external/non-resident ordinary (NRO) bank account by using the online payment mode or issuing post-dated cheques or giving standing instructions from his account. Assuming that you want to avail tax benefits by paying the EMIs, you will not be able to do so. If you still want to pay on his behalf, then there is no need to get the loan transferred in your name. You can do so directly by opening a joint NRO account with your brother and then issue cheques or standing instructions from the account. You must inform the lender about the arrangement.
Will my home loan provider agree to reduce the EMI I pay and increase the tenor of the loan? Will the loan become expensive?
Your lender will agree to reduce the EMI and increase your loan tenor only if it is within your retirement age. However, you should note that the absolute amount of interest one pays depends on the period for which the loan amount is used. The longer you take for repaying your home loan, higher will be the absolute amount of interest you pay. So, it will not get expensive. But if you increase the period, you will have to pay interest for the extended period of the loan.
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