Here, we will discuss a Rs 25 lakh personal loan at a 13 per cent annual interest rate for 5 years. The EMI will be Rs 56,882.68,, interest will be Rs Rs 9,12,961, and the repayment amount will be Rs 34,12,961.
Instead of Rs 56,882.68 EMI, if one goes for an estimated Rs 67,068.74 EMI, the loan tenure will be reduced to 4 years.
The estimated interest will be reduced to Rs 7,19,300, and the estimated repayment amount will be Rs 32,19,300. So, by paying an estimated Rs 10,186.06 extra in EMI, the estimated amount one will save will be Rs 1,93,661.
In that case, they need to increase their EMI from estimated Rs 56,882.68 to estimated Rs 74,405.24, and the loan tenure will be reduced from 60 months to 42 months.
After increasing EMI by an estimated Rs 17,522.56, the loan interest will be reduced to an estimated Rs 6,25,020, and the estimated repayment amount will be Rs 31,25,020. The estimated amount saved will be Rs 2,87,941.