Every housing finance companies or banks have customized repayment options to suit every individual's requirement and also repaying capacity with some tax benefits. They have thereby come up with more flexible and Multiple Repayment Option.

A few among them are:

Step-up Repayment Facility

The objective of step-up repayment is to provide the borrower with a repayment schedule, which is linked to expected growth in income. It not only helps a customer get a larger amount of loan as compared to the loan under the normal housing loan; but the customer can avail of a higher amount of loan and pay lower EMIs in the initial years, which is subsequently accelerated proportionately with the assumed increase in his income.

Flexible Loan installments Plan

This repayment option offers a customized solution to suit the needs of customers whose repayment capacity is likely to alter during the term of the loan. In cases when a borrower is nearing retirement, the loan is structured in such a way that the EMI is higher during the initial years and subsequently decreases in the latter part proportionate to the reduced income of the customer. This option helps such customers combine the incomes and take a long term home loan where in the installment reduces upon retirement of the borrower.

Tranche Based EMI

Customers purchasing an under construction property, need to pay interest (on the loan amount drawn based on level of construction) till the property is ready. Tranche Based EMI is a special facility offered by some banks to help customer save this interest. Customers can fix the installments they wish to pay till the property is ready. The minimum amount payable is the interest on the loan amount drawn. Anything over and above the interest paid by the customer goes towards principal repayment. The customer benefits by starting EMI and hence repays the loan faster.

Accelerated Repayment Scheme

Accelerated Repayment Scheme offers you a great opportunity to repay the loan faster by increasing the EMI. Whenever you get an increment, increase in your disposable income or have lump sum funds for loan prepayment, you can benefit by

• Increase in EMI means faster loan repayment


• Saving of interest because of faster loan repayment


• Or invest lump sum funds rather than use it for loan prepayment. The return from the investments also gives you the comfort of paying the increased EMI.

Balloon Payment

Balloon Payment is an augmentation tool offered by the financial institutions, which helps in increasing the loan eligibility of the customer without increasing the EMI by assigning securities like National Savings Certificate (NSC), LIC policies etc. The present value of the maturity amount of assigned securities is combined with the loan amount to arrive at the enhanced loan eligibility. Under this facility, the EMI is calculated on the net loan amount (i.e. total loan less the present value of the maturity value of the securities).