I took a loan of 25 lacs from HDFC (in the year 2012) for a tenure of 20 yrs. My current outstanding Principle balance is 17 lacs. I read in our forum that pre-closing a home loan will affect the CIBIL rating etc. Below are my questions.
1. I will be able to arrange the amount required to pre-close the home loan in the next 2 to 3 months. Can I go ahead and pre-close it?
2. If there is, what is the best way to pre-close a home loan. Meaning, should I pre-pay the entire 17 lacs and close it in one go or should I pay 16.5 lacs and reduce the principle to 50000/-, make my EMI as 10000 per month, and let the loan amount nullify automatically? Will this make a difference in any way? If so, how?
3. How will pre-closing a home loan affect my CIBIL rating?
4. If any one ask why I want to pre-close the home loan? One reason, I am able to arrange for it. Another, personally, I feel that closing the home loan and getting the house in my name is good rather than the bank having all the docs etc.
Please answer the above ones and clarify my queries.
Thanks
Muthu