Want to save Rs 2.26 lakh in interest on your Rs 15 lakh personal loan? Here's how it can be done
Personal Loan Calculator: Personal loans don't involve collateral, so they come at a higher interest rate compared to home loans and auto loans. But there are ways to cut the interest amount and repay the loan earlier than the stipulated time.
Personal Loan Calculator: Sometimes, when we are in need of money for urgent situations and can't arrange it from somewhere, a personal loan comes as a prominent choice. People take a personal loan for a number of reasons, such as wedding, home renovation, emergency situations, medical expenses, vacations, etc. Personal loans don't involve collateral, so they come at a higher interest rate compared to home loans and auto loans. But there are ways to cut the interest amount and repay the loan earlier than the stipulated time. Here, we give projections of how you may save Rs 2.26 lakh in interest and 15 months in duration on a Rs 15 lakh, 5-year personal loan.
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Personal loan conditions
In our projection, we will show a personal loan of Rs 15 lakh for 5 years (60 months). We are assuming the interest rate at 13 per cent annually.
What will be personal loan EMI?
The estimated equated monthly instalment (EMI) for the personal loan will be Rs 34,130.
Personal loan interest and repayment amount
At 13 per cent interest, the estimated interest on a Rs 15 lakh, 5-year loan will be Rs 5,47,777, and the estimated repayment amount will be Rs 20,47,777.
How can loan interest and duration be reduced?
For that, one needs to make 2 prepayments of Rs 1.50 lakh each. It means one needs to make prepayments of 10 per cent of the principal amount of Rs 15 lakh.
When does one need to make prepayment instalments?
Here, one needs to make a prepayment of Rs 1.50 lakh each in the 12th and the 24th month of the loan tenure.
However, the EMI amount will remain the same throughout the loan.
How may prepayments benefit the borrower?
After making 2 prepayments of Rs 1.50 lakh each, the interest amount will be reduced from estimated Rs 5,47,777 to an estimated Rs 3,21,421.
How much money will the borrower save?
With the interest amount reduced, the estimated amount that the borrower will save will be Rs 2,26,356.
What will be the new loan tenure?
Prepayments will also reduce the personal loan duration from 60 months to an estimated 45 months.
Disclaimer
(Our calculations are projections. Actual loan conditions may vary. DO your due diligence or consult and advisor before taking a loan)