Any Rewarding Ways to Close Home Loan Outstanding Amount?

[abhishek0882]

I have a home loan from ICICI bank which currently has an o/s of about 13 lakhs. Due to some reasons, I am closing out this loan next month, in June. Wanted to know is there a best way to close out this loan? I mean something that will get me some value back in any form? I understand that paying the loan with credit cards is not possible, but is there any other way in which this can be done to earn something out of it?

 

[senasenthil]

I have a home loan from ICICI bank which currently has an o/s of about 13 lakhs. Due to some reasons, I am closing out this loan next month, in June. Wanted to know is there a best way to close out this loan? I mean something that will get me some value back in any form? I understand that paying the loan with credit cards is not possible, but is there any other way in which this can be done to earn something out of it?

I too have same requirement and request for suggestions, please.

 

[Deleted member 11974]

I have a home loan from ICICI bank which currently has an o/s of about 13 lakhs. Due to some reasons, I am closing out this loan next month, in June. Wanted to know is there a best way to close out this loan? I mean something that will get me some value back in any form? I understand that paying the loan with credit cards is not possible, but is there any other way in which this can be done to earn something out of it?

do this
transfer money from your cards to your bank ACC using 3rd party apps like nobroker bharatnxt. This will get you milestone benefits and points also if I am not wrong.
Then by june pay your cc bills through cheq and get coins

 

[vaibhav111vaibhav111 is verified member.]

BharatNXT comes to mind, but then whoever receives the money can be your friend/spouse, and then you would have to split and transfer 6.5 each to two people. Also, those individuals should have little to no income. It's possible that you could do it, but it's not an easy path, and BharatNXT may or may not work. The card issuer may raise questions about the large amount, so there is a risk involved.

 

[Deathsnatcher]

I have a home loan from ICICI bank which currently has an o/s of about 13 lakhs. Due to some reasons, I am closing out this loan next month, in June. Wanted to know is there a best way to close out this loan? I mean something that will get me some value back in any form? I understand that paying the loan with credit cards is not possible, but is there any other way in which this can be done to earn something out of it?

You can pay loan emi or complete loan using apps like snapay / bharatnxt
it will count as utility and you will get rewards points based on your cards

 

[jack333]

Can we pay directly to loan account?

 

[NikTravelEnthusiast]

I have a home loan from ICICI bank which currently has an o/s of about 13 lakhs. Due to some reasons, I am closing out this loan next month, in June. Wanted to know is there a best way to close out this loan? I mean something that will get me some value back in any form? I understand that paying the loan with credit cards is not possible, but is there any other way in which this can be done to earn something out of it?

My suggestion, don't think about closing home loan with the help of credit card usage.
For the sake of rewards points,one should not put himself in such risk. Home loan ammounts are high denomination. If you rotate money by credit cards, it might send alerts to your Credit card issuer, and Income tax dept also.
Plus BharatNXT transsctions should be done occasionally to minimize the risk,as advised by all moderators.
So keep it simple Mate! Use hard earned money to pay back loans.

 

[jack333]

Paytm and other apss like freecharge also has loan repayment option. You can check if they accept credit card

 

[Deathsnatcher]

Can we pay directly to loan account?

Yes exactly thats what people do.
@NikhilTravelLover just a small query
i have asked this sone other forum as well and asking here also to understand more

taking an example for better understanding
cc usage is kind of loan right?
i had a loan of x amount from hdfc
i took another loan of x from axis and put that loan from them to close hdfc [interest rate was less]
a month later i paid the x amount from cc using 3rd party app [the 1.2% charge i paid and saved interest 9.5%]
a month later cc bill generated and i cleared all the dues
so is it wrong to save interest from one bank if we get a better offer from other bank or use card if i could save some more?

 

[helloworld]

Yes exactly thats what people do.
just a small query
i have asked this sone other forum as well and asking here also to understand more

Nothing wrong with this analysis, just keep in mind that various parameters will play an important role in this process and help makes the decision.

Like, as per you example

HDFC Loan Interest rate: 14%
Axis Loan Interest rate: 11%

So, you took this Axis loan to save 3% on HDFC loan which normal scenarios might be good idea but,

- have to check pre-closure charges with other bank (usually 2% to 4% range) which takes the benefit we received while transfer.
- have to check how much interest we paid w.r.t principal during closure time (banks usually won't allow you to close the loan under 12 months for this reason because they take more interest during 1st half the tenure).

If both are satisfied and still we're getting positive value with that transfer, no issues and one can happily take the offer.



This is an example of 5L Principal, 3Y tenure, 14% interest rate.

If one has to pre-close this during 2024 = Pre-Closure charges apprx. 8,400 (if it is 2%+GST for example)

So, total of ~144,079 principal you paid so far (60987+8400 = 69387) interest which apprx. 48% interest rate.

One has to verify and find the suitable time frame to pre-close the loan and must aware charges w.r.t amount we pay.

Same, if one wants to pre-close during last 6 months of tenure, that also not a good idea. Because we pay more as part of pre-closure charges compared to actual interest we pay to bank.

Note: In loans, if they say interest rate is 11% means its not every month you pay interest 11% (on average over tenure you pay 11%, so it can start with 50% during initial months and reduce gradually so that average 11% comes at the end).


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If everything is positive and still getting good value along with CC benefits, definitely can use the option. Atleast our goal is to save money, right?

 

[Deathsnatcher]

Very Well explained @helloworld so you agree with my example above stated if someone get benefits while shifting loans from one bank to another or from cc to loan settlement one should do it
after all we all want to save money right?

 

[NikTravelEnthusiast]

Very Well explained @helloworld so you agree with my example above stated if someone get benefits while shifting loans from one bank to another or from cc to loan settlement one should do it
after all we all want to save money right?

@helloworld has explained in a very precise way. One has to see all the hidden charges. Real game is in hidden charges.

Recently I saw an article, in which RBI has mandated all financial institute to disclose all the charges in a single term knowm as ' APR'. I was shocked to see the actual percentage of money is bein charged from us. Bank says 14 % interest rate. But in reality APR can range from 30 % to 140 %. If possible I will try to share the article link here.

So after going through all the charges, if you still find thats its an beneficial deal, then surely one should proceed.

 

[NikTravelEnthusiast]

Coudnt find the exact article now. But sharing a youtube short clip. That might help.

 

[helloworld]

Very Well explained @helloworld so you agree with my example above stated if someone get benefits while shifting loans from one bank to another or from cc to loan settlement one should do it
after all we all want to save money right?

bank to bank - agree as long as you got +ve returns.
cc to loan - as long as you follow this

a month later cc bill generated and i cleared all the dues

I know you heard this so many times but still saying,

- one should spend only the amount one can pay within due time, shouldn't have any money issues
- while doing that one should also consider the worst case scenario, like we may need to transfer that saved money for some urgent purpose - still we're able to repay full by due date, no way to miss it.

As long as you pay within time, no one cares even banks also don't like it, but otherside that is different story then topic is how to save upto 42% interest.?

 

[Deathsnatcher]

cool it solves the op question as well other people queries too 😉

 

[abhishek0882]

Dear All,

Thank you so much for all your responses. Well, for me, rotation is and will never be an option. Also, I have the amount saved up and would pay the entire bill on cc bill generation. Even I do not believe in spending more than I can repay. I always pay the full bill amount well in time.
I asked the question because knowing that I am definitely closing the loan and that I do have the full amount saved up and kept separately just for this purpose, if I paid with a credit card I could gain some good and easy points, while knowing full well that there was no risk of defaulting on the cc payment. It would be a good idea if there was a clean and approved way, for lack of a better word, to repay a loan with a cc.

However, it seems there is no way to do that except for rotation or roundabout way to do it. So I will stick to paying it directly from my account. Like @NikhilTravelLover mentioned in his response, its the best way to do it according to him and I agree.

Once again, thank you all.

 

[varkey]

@abhishek0882 ICICI allows you to make home loan prepayments using a credit card. But it may be categorised with a not that beneficial MCC code.

Home Loan Existing Customers Login | ICICI Bank

Are you a ICICI Bank customer? Enjoy special benefits with our Home Loan. Easily access Mortgage customer service by logging into your home loan account. Apply today!

www.icicibank.com

CC based pre-payment is possible when logged in through the above link.

 

[jack333]

@abhishek0882 ICICI allows you to make home load prepayments using a credit card. But it may be categorised with a not that beneficial MCC code.

Home Loan Existing Customers Login | ICICI Bank

Are you a ICICI Bank customer? Enjoy special benefits with our Home Loan. Easily access Mortgage customer service by logging into your home loan account. Apply today!

www.icicibank.com

CC based pre-payment is possible when logged in through the above link.

Any charges for payment through cc? What's the mcc?

 

[varkey]

@jack333 No charges, I recently made a payment using my Axis Ace card but don't think I'll get any points for it.

Not sure of the MCC, is it displayed anywhere? The transaction shows up as "EAZYPAY, WWW.ICICIBANK, IN"

 

[jack333]

@jack333 No charges, I recently made a payment using my Axis Ace card but don't think I'll get any points for it.

Not sure of the MCC, is it displayed anywhere? The transaction shows up as "EAZYPAY, WWW.ICICIBANK, IN"

Can you please ask axis customer care the mcc?