Home Loan Calculator: How you can save nearly Rs 20 lakh and 4 years on Rs 60 lakh, 25-year loan
Opting for a shorter loan tenure can save you significantly. By increasing your EMI slightly, a Rs 60 lakh loan for 25 years reduced to 21 years can help save nearly Rs 20 lakh and several repayment years.
In most of the cases, individuals look for a minimum EMI option considering their comfort. But sometimes pushing your limits a bit can benefit you in the long run. For instance, if you took a loan of Rs 60 lakh for a tenure of 25 years, with an interest rate of 9.5 per cent. If you choose a tenure of 21 years instead of 25 and increase the amount of your EMI a bit, let’s say approximately Rs 3,000. You can save nearly Rs 20 lakh and years on a loan of Rs 60 lakh. Let’s understand how will it happen through calculations.
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(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning)
Understanding the numbers: Long vs short tenure
When it comes to home loans, most people opt for longer tenures and lower EMIs to stay within their comfort zone. However, a slight adjustment to your repayment plan could save you a significant amount of money and time.
Long vs. short tenure
At a 25-year tenure, the EMI is approximately Rs 52,422, and the total interest paid over the period can be approximately Rs 1,57,26,540.
Now, if you reduce the tenure to 21 years, the EMI increases to Rs 55,256 (just Rs 2,834 more). However, the total interest paid drops significantly to approximately Rs 1,37,58,794.
Why choose a shorter tenure?
Shorter tenures lead to reduced overall interest payments.
Paying off the loan early gives financial freedom sooner.
Enables individuals to channel funds into other investments earlier.
What will be your EMI on Rs 60 lakh loan for 25 years?
On a Rs 60 lakh loan for 25 years at a 9.50 interest rate, the estimated monthly EMI amount will be Rs 52,422.
What will be your total interest on Rs 60 lakh loan in 25 years?
The estimated total interest in 25 years will be Rs 97,26,540 on a Rs 60 lakh loan.
What will be your total repayment amount on Rs 60 lakh loan in 25 years?
The total estimated repayment amount will be Rs 1,57,26,540.
What will be your EMI on Rs 60 lakh loan in 21 years?
On a Rs 60 lakh loan for 21 years at a 9.50 interest rate, the estimated monthly EMI will be Rs 55,256.
What will be your total interest on Rs 60 lakh loan in 21 years?
The total estimated interest in 21 years will be Rs 77,58,794 on Rs 60 lakh loan.
What will be your total repayment amount on Rs 60 lakh loan in 21 years?
The total estimated repayment amount will be Rs 1,37,58,794.
How much money you will save?
The estimated amount saved because of an increase in EMI will be approximately Rs 19,67,746. On the other hand, the time saved will be 4 years.