Home Loan Calculator: How you can save Rs 17.88 lakh in interest and 5 years in duration on Rs 50 lakh, 20-year loan by paying Rs 5,604 extra in EMI
Home Loan Calculator: Since we take a home loan for a long duration, there is a high likelihood that we are paying a higher interest amount than the principal. In the initial years, the interest amount you pay is much higher than the principal. In the later stages of your loan, you pay more principal than interest. So, if, in the early stages of your loan, you pay a higher equated monthly instalment (EMI), it will add to your principal amount. The impact of it will be that you will repay lower interest than earlier. Not only that, you is likely to trim your repayment amount significantly. Here, we will tell you how if you pay Rs 5,000 extra in your EMI, your interest on a Rs 50 lakh, 20-year loan can be cut down from Rs 61.86 lakh to Rs 43.99 lakh.
(Disclaimer: Calculations in this article are for knowledge purpose only. Actual home loan interest rates and terms and conditions may vary. Do your due diligence or consult an expert before taking a home loan).
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Home loan conditions
Here, we are taking the example of a Rs 50 lakh home loan. The duration of the loan is 20 years, while we will take the interest rate of 9.50 per cent annually.
What will be your estimated home loan EMI?
Given the above conditions, the estimated EMI for the loan will be Rs 46,607.
What will be total interest and repayment amount?
The total estimated interest on the loan will be Rs 61,85,574, and the estimated repayment amount will be Rs 1,11,85,574.
If you pay Rs 5,604 extra on your EMI?
If you pay Rs 5,604 extra on your EMI, your EMI will be Rs 52,211.
What will be the new interest and repayment amount?
With adding Rs 5,604 extra every month, your interest will be reduced to Rs 43,98,022, and the estimated loan repayment amount will be Rs 93,98,022.
What will be the new home loan tenure?
The increased EMI will not only reduce your interest, but it will also cut down your repayment period from 20 years to 15 years.
How much money you will save
Over all, you save an estimated Rs 17,87,552 on your home loan.