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Home Loan companies allow you to choose the repayment cycle of your EMIs. Whether you are a salaried person or businessman, adjust the timing of the EMIs according to your cash inflows.
Home Loan repayment

When you take a home loan, you make a long-term commitment to the lender. This commitment could span a period of up to 20 years.

During this period, regular payment of EMIs through a convenient mode is very important for both you and the lender.

Regularity of EMI payment
  • Always try and maintain an amount equal to at-least two EMIs as a balance in your bank account.
  • Non payment or delayed payment can lead to:
    • a penalty of 2% on your EMI amount. Know More
    • a negative record in your credit report generated by credit bureaus. Know more
A credit bureau comprises banks and financial institutions as its members. It is a repository of credit information of all customers of its members. Credit Information Bureau (India) Limited – CIBIL – is one such organization that collates credit information contributed by its members and disseminates it to lenders, helping them in their credit-decision-making and lending process. Members provide the credit information of their customers with CIBIL month on month, thus the CIBIL database is updated. This information is then used by credit underwriters to make effective credit decisions.

Therefore, with proper financial planning and by maintaining a good track record of repayment of dues for loans / credit cards, you can build a good credit history for yourself, which is considered while applying for loans in the future.
Convenience of EMI payment

There are three modes through which you can make payment of the EMIs of your home loan:

  • Post-dated cheques (PDCs)
    This is a mode of payment where you are required to submit signed post-dated cheques to the home-loan provider for a tenure specified by them.
  • Auto-debit
    This is an electronic mode of funds transfer from your savings bank account to the home-loan account. For you to avail of this facility, both these accounts should be with the same bank.
  • Electronic Clearing Service (ECS)
    This too is an electronic mode of funds transfer from your savings bank account to the home-loan account. You can avail of this facility if your savings bank account and home-loan account are with different banks.
You can give a one-time ECS/auto-debit mandate and the EMI amount will be debited to your account automatically on the due date. Know more

The advantages of Auto Debit or ECS, both to home-loan companies/banks and consumers, are many, including savings on administrative costs, printing, dispatch and reconciliation. There is no possibility of losing the instrument of payment in the post. The chances of fraud are reduced, as there is no access to paper instruments like cheques. Payments are automatically made on time, on the designated date, reducing dependence on human memory and effort. For banks, there is less paperwork.

To summarise, it is advisable to opt for either ECS or Auto Debit as a mode of repayment of your EMIs as both these modes are convenient, safe and economical way of making regular periodic payments. ECS facility is currently available in 63 locations across the country.

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