Everything you wanted to know about repaying your Home Loan
Your home loan can be repaid in the following ways:
- EMI payments
- Partial prepayments
- Full prepayment or preclosure of the loan
This section talks about each type of repayment in detail and outlines the various do’s and don’ts for every method. Please go through this section in detail, as correct and timely repayment is one of the most important responsibilities of the customer.
What is EMI?
EMI is the Equated Monthly Installment that you need to pay towards your loan obligation.
Your EMI constitutes of 2 components – interest and principal repayment. Over the tenor of the loan, the beak-up between these 2 components keeps changing. For the first few years, the interest component is higher, however, as the loan progresses, the interest component keeps reducing. This happens due to the continuous reduction in principal outstanding on your loan on which interest is charged. Since EMI has to remain constant, the principal repayment component of the EMI increases over the tenor of the loan.
How can I pay EMI?
EMI payments towards your Loan Account can be made through any of the following repayment instructions:
- Standing Instructions (SI)
- National Automated Clearing House (NACH)
Standing Instructions (SI)
If you hold a Banking Account with Citibank, N.A. then you can choose to pay your EMIs from your Citibank Account through a Standing Instruction. This is a convenient method of repayment as it minimizes paperwork.
National Automated Clearing House (NACH)
If you do not hold a Banking Account with Citibank, N.A., you can choose to pay your EMIs through an NACH instruction. This involves an automatic clearance of your EMI from your Banking Account with another bank, based on Standing Instruction from you. NACH mandates can only be given from a Bank Account with a valid MICR code as per the list circulated by the Reserve Bank of India. The NACH facility too avoids the hassles of replenishing PDCs at periodic intervals and minimizes paperwork.
In addition to the above standard options, you may also use NEFT electronic payment option to make the payment towards the loan account, when required.
The faster alternative to loan repayment
Can I prepay my loan or a part of my loan?
Contractually, your loan is to be repaid over the tenor of the loan. No additional amount over and above the EMI is required to be paid. However, on specific requests for prepayment, Citibank may allow you to make prepayments into your Loan Account.
Can I get my EMI revised after prepaying my loan partially?
Yes, you can revise your repayment schedule provided you have made a partial prepayment towards the home loan account subject to approval from Citibank, NA.
In all other cases, you will have to continue the repayment of your old EMI. In such cases, your loan will run off faster as the excess amount in the EMI will go towards reducing the principal outstanding in your loan.
When and how can I prepay my Home Loan?
In case you wish you prepay on your loan, please contact our CitiPhone officers or visit us at www.citibank.com/india. Based on written advice you can make payments on any working day. Payment is to be made via draft/cheque favouring “Citibank N.A. A/c (your name)". Payment can also be made vide NEFT option.
Are there any prepayment charges?
Kindly refer to the Schedule of Charges to know more about the applicable prepayment charges, if any, on your loan.
If I want to fully prepay my loan, what will the final prepayment amount be?
Your final prepayment amount is calculated as follows:
- Interest due (for the number of days from 1st of the month to the date of credit of prepayment. If the payment is done through cash, the credit is received on the same day. However, consider an additional five days if payment is made by cheque / demand draft)
- Penal interest (chargeable by Citibank for non-payment/late payment of an installment) or bounced cheque charges, if applicable
- Prepayment Penalty Charges, if applicable + taxes
- Any other charges as applicable
You are requested to check the final prepayment amount with our CitiPhone officers or visit us at www.citibank.com/india
What is my proof that I have made the payment?
The customer’s copy of the Payment Deposit Slip duly acknowledged is your proof of payment. This payment will also reflect in your Loan Account Statement once the cheque / demand draft is realized.
What do I get when I fully prepay my loan?
On full prepayment of your loan along with dues as applicable and subject to satisfactory completion of closure formalities as required, The Bank shall :
- Provide a confirmation on loan closure. You will be issued a “No Dues Certificate”.
- Release the Property papers in the bank’s custody within 15 days of the repayment of all dues agreed to or contracted. If any right to set off is to be exercised for any other claim, the bank will give due notice with full particulars about the other claims and retain the Property papers till the relevant claim is settled/paid .
- Refund any excess amount collected.
Points to Note:
- Do not sell your property until you have cleared your Citibank Home Loan. Your property is mortgaged to Citibank till the time you pay your loan and any other charges/dues in full
- To give written instructions to close your Loan Account
- To collect the "No Dues Certificate" after full prepayment of your loan
Your monthly payments start from the subsequent month following the disbursal of the loan.
You are charged interest from the date of the first disbursal cheque only. Although the EMI is collected for whole month, the actual interest charged is only from the date of the first disbursal cheque. Any amount paid by you in excess of interest will be adjusted towards your outstanding principal.
No, we will start collecting EMIs only when your loan is disbursed.
Repayment instructions are executed on the 1st working day of every month.
EMIs that have been cleared can be seen in your Bank Statement (where the debits would show), or in your latest Loan Account Statement (where all credits would appear). You can login to Citibank Online (CBOL) through www.citibank.com/india to view your Loan Account Statement at any given point of time. (Refer to the section on Citibank Online)
Yes, if the situation demands a change. For instance, if you discontinue banking with your current bank and move to another bank, you would need to issue fresh EMI instructions. Also, in case of a change in your EMI due to a revision of interest rate, the bank may ask you to submit fresh instructions. Please remember that the signatory should remain the same.
You can give us fresh repayment instructions from another Banking Account along with a letter explaining the exact problem and signature verification from your banker. Please note that EMI instruction for the current month or the immediate next month cannot be swapped. The EMI instructions for the month following the “current month” are the earliest that may be swapped.
In case Citibank asks you to submit fresh repayment instructions due to a change in EMI amount, the bank will mention the new EMI for which these instructions will have to be drawn up. It is your responsibility to ensure that the fresh instructions reach the bank within the stipulated period of time. Non-adherence will attract penal charges.
Yes, you can make partial prepayments towards your loan outstanding over and above your EMI.
Yes, you may continue the repayment of your old EMI. This will ensure that your loan runs off faster as the excess amount goes towards reducing the principal outstanding in your loan.
For under-construction loans (e.g. in self-construction cases or developer under construction cases) you have option of paying only the interest amount on the disbursed loan amount. Such an option should be exercised at the time of loan sanctioning.
However, for all other loans you must pay the EMI, which is inclusive of both interest and principal.
Once the loan is disbursed to you, you are under obligation to repay the loan as per the agreed repayment schedule. Citibank is entitled to take legal action if you do not pay your EMIs in the stipulated time. Citibank will also charge penal interest for delayed payments. Please refer to the “Schedule of Charges” section to know more.
If your EMI bounces, please ensure that fresh payment is made in lieu of the bounced installment immediately. This is important in order to protect your credit rating with Citibank and to avoid any further penal interest and delayed payment charges. Please note that bouncing of an EMI instruction is a criminal offence under Section 138 of the Negotiable Instruments Act.
No, as of now we don’t have this option and EMI is charged on the 1st of every month.
Yes, the current account will be closed with closure of the loan.
Yes, insufficient funds or a bounced EMI instruction attracts additional charges. Please refer to the “Schedule of Charges” section to know more.
- It is your responsibility to ensure that repayments towards your loan are timely and regular
- Any delay of your payment will attract penal charges
- In case of default, Citibank is entitled to take legal action for recovering the dues
*Terms and conditions apply. All loans are at the sole discretion of Citibank N.A. Citibank reserves the right to ask for any additional documents from the applicant. Citibank reserves the right, at anytime, with prior notice to add / alter / modify / change or vary any of the Terms and conditions or to replace them, wholly or in part. Click here for Most Important Terms and conditions. Please refer to our Schedule of Charges.
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