Got a raise? Have some extra savings? Want to finish off your loan faster? We’ve got the right motivation for you!
At Home First Finance Company (HomeFirst), we always strive to find better ways to deliver the best to our customers. Knitting customized products that suit the needs of our customers has become our cornerstone.
With a consumer-first approach, we continue to encourage our customers to make as many pre-payments as possible. This helps them reduce their loan burden in the long run.
What we’re trying to say is – Repaying a loan faster, safeguards the customer’s interest as well as SAVES their INTEREST paid behind a loan.
Confused? Don’t worry! We’ll explain.
When we take any type of loan from an FI or a bank, the most common way to repay the money is through Easy Monthly Instalments (EMIs). The bank/FI would deduct these EMIs from our bank account on a particular due date.
An EMI has 2 components – Interest + Principle.
For example, if your EMI is Rs.10,000. Some part of the EMI goes towards paying interest & the remaining part gets deducted from your principle.
How do pre-payments help? Yes, we’re getting there!
Whenever you make a pre-payment towards your loan, it directly gets deducted from your outstanding principal amount. This means, your interest will now be charged only on the remaining amount.
Result?
Interest – Saved.
Loan Tenure – Reduced.
However, we realized there are a lot of customers who are willing to make pre-payments but find it difficult to set aside money in huge chunks. Hence, despite the willingness, the purpose of pre-payment gets defeated. ☹
We thought to ourselves, “Why don’t we ask our customers to make micro pre-payments that gets auto-debited from their bank account on a monthly basis?”
And the answer was, “Why didn’t we think of this before!”
Introducing: HomeFirst Auto-Prepay
Auto-prepay is a first of its kind product that empowers the customer to make pre-payments starting from amounts as low as Rs. 500 on a monthly basis. The idea is to regularize pre-payments in such a way that it benefits the customer in the long run by reducing their overall loan tenure and total payable interest.
How does Auto-Prepay work?
Auto-Prepay is just like an auto-debit service where the customer can set their monthly pre-payment amount that would be deducted from their bank account every month. This amount would be in addition to their EMI.
Here are 3 solid reasons why you should subscribe to HomeFirst Auto-Prepay today!
1. No Pre-payment fee: Auto-Prepay is Free of charge
At Home First Finance Comapny (HomeFirst), we don’t believe in any type of “pre-payment charges”. Auto-Prepay is the only product in the industry that lets you make pre-payments starting from an amount as low as Rs.500. And guess what! You can avail this service free of charge. Pretty awesome, isn’t it?
2. Save on your interest + Reduce your tenure
With Auto-prepay you not only save on your interest, but you reduce your tenure too. Check out this example to have a better understanding. Let’s calculate your total money outflow with and without auto-prepay
Assume you have taken a loan of Rs. 10,00,000 for a tenure of 20 years (240 months) at 10% RoI.
Scenario 1 without Auto-Prepay – You end up paying Rs. 23,16,051 at the end of 20 years at an interest rate of 10%. Which means Rs. 13.16 lakhs worth of Interest on a loan of Rs.10 Lakhs! Crazy right?
Scenario 2 With Auto-Prepay of Rs. 1,000 – You end up saving Rs.3,58,494 on your interest and shave off 56 EMIs on your home loan. That’s like getting debt-free 5 years early, that too with huge savings on your interest!
Follow this link for to calculate your own auto-prepay savings https://homefirstindia.com/home-loan-prepayment-calculator/
3. Unsubscribe, re-subscribe or change your auto-prepay amount anytime you want!
We understand sometimes it can get difficult to pay any amount in addition to your EMI. You can increase or decrease the auto-prepay amount whenever you want. All you need to do is inform us 15 days prior and you are all set!
We hope this article helped you enhance your knowledge about pre-payments, its benefits and how to make the most of it for your benefit. ?
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