Purchasing your dream house can be a time-consuming process involving a lot of research and running around. One of the largest financial commitments that can aid in this case is a home loan. Every home loan borrower is required to return his loan over a set period of time. Most borrowers, on the other hand, may be unaware of the various loan repayment choices available from banks. Even though every borrower has access to the easy payback option, buyers can choose from the following repayment choices to meet their specific needs.

Home Loan Repayment Options

Delayed EMI

If you are financially burdened after spending your money on a down payment for a home, you could choose this home loan repayment option. If you have purchased an under-construction property, you may be paying rent as well as EMI payments, which can be a bit taxing. Salaried persons and working professionals between the ages of 21 and 45 are often eligible for this repayment plan.

Step-Up Repayment Option

Step-Up Due to the lengthening of the loan term, repayment results in an increase in the EMI amount. You can pay a lower EMI for the first few years of your loan repayment, but as the loan tenure lengthens, the amount will grow. There are home loan calculator on lender’s website to calculate the EMI.

A Step-Up Borrowers who are new to their careers and want financial stability are eligible for repayment. It is made available to these people since they may not have enough money to pay significant EMIs at the start of their careers. They can afford to increase their EMIs as their careers/financial advance and their financial status improves.

Step-Down Repayment

The flexible installment plan is also known as the step-down repayment plan. This plan is designed such that as the loan proceeds, the EMI amount due for your home loan decreases. This means that the repayment installments, or EMIs, will be large in the beginning and will decrease in the latter years. To compute EMI payments at various phases of repayment, this plan leverages the concept of reducing the balance.

Lump Sum Repayment

Lump-sum Borrowers might use repayment to pay off their entire debt as soon as feasible before the loan term finishes. Home loans for under-construction homes are usually disbursed in installments that are phased out according to building progress. The borrower can pay interest on the money sourced until the last loan payment is paid out in such instances. The borrower can begin paying EMI payments after the full amount has been disbursed. If the borrower has sufficient finances, he or she can start making EMI payments on the loan amount that has been disbursed. The lump-sum payment is adjusted for interest, and the remaining balance is applied to the principal.

Balloon Repayment

Balloon Repayment resembles lump-sum repayment in certain ways. The borrower can, however, pay a considerable sum for the final installment (almost one-third of the whole loan amount).


Refinancing is the process of paying off an existing house loan with a new one. Lower interest rates and better repayment choices are available through refinancing. The borrower’s ability to repay the loan is not harmed as a result.

An existing home loan can be refinanced with a new loan with lower EMIs and better interest rates. While refinancing, a borrower might also bargain for a shorter loan term. Transferring a home loan balance to a new credit provider might also aid in credit score improvement.


Individuals with extra cash can utilize it to pay off their house loan EMIs early. By allowing the borrower to return the loan as quickly as possible, prepayment shortens the loan term. Prepayment of a portion or the entire outstanding loan balance is permitted. This approach can considerably reduce your home loan EMI. It’s worth noting that some home loan companies may levy a penalty if you choose to pay off your loan early. As a result, when selecting a prepayment option, one should be aware of such penalty fees.


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