Home Loan Calculator: How boosting EMI by 6.69% can help one save Rs 20 lakh in interest and 5 years in tenure on Rs 50 lakh loan
If you increase your EMI by 6.69 per cent on a Rs 50 lakh home loan, you can save nearly Rs 20 lakh in interest payments. Want to understand how? Explore how small adjustments reduce long-term costs effectively.
Small adjustments in your loan repayment strategy can do wonders. Suppose, you have a loan of Rs 50 lakh at 9.50 per cent interest rate for 25 years, if you increase your monthly EMI by just 6.69 per cent, you can save nearly Rs 20 lakh in interest payments. This minor change may not feel important initially, but it can make a substantial difference in the long term by reducing your overall interest burden. By opting for a slightly higher EMI, you can shorten the loan tenure and reduce the amount of interest accrued. Therefore, let’s break down how this strategy works and why it can be a smart financial move.
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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 home loans
Home loans help individual realise their financial dream of owning a home. These loans are provided by banks, financial institutions, and non-banking financial companies, and are repaid through EMIs. Since the home loans are taken for long durations such as 15 years or over, the borrower pays huge interest on them.