Home Loan Calculator: How you can save Rs 20.39 lakh in interest and 56 months in tenure on Rs 60 lakh, 25-year loan with 1 additional EMI every year
Home Loan Calculator: Paying one additional EMI every year can lighten the loan burden significantly. Not only can it reduce the interest amount, but it can also shorten the loan tenure.
Home Loan Prepayment Calculator: As prices of real estate properties are getting higher, people are going for big-ticket home loans. They take such loans for long durations. The longer it is, the higher the interest amount. So, it is highly likely that the interest amount one will repay will be quite higher than the principal. There can be many ways to reduce this interest. Some can also shorten the loan tenure.
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How home loan works
If one takes a Rs 50 lakh home loan for 20 years at 10 per cent interest rate, the estimated EMI will be Rs 48,251, the estimated interest will be Rs 65,80,260, and the estimated repayment amount will be Rs 1,15,80,260.
How home loan works
But if the same loan is taken for a 25-year tenure, the estimated EMI will be Rs 45,435, the estimated interest will be Rs 86,30,511, and the estimated repayment will be Rs 1,36,30,511.
Thus we see that on a 5-year-longer tenure, the borrower needs to repay Rs 20,50,251 more.
What can be done to reduce interest amount?
One can make prepayments after the lock-in period. These prepayments can be made in one go or in instalments. Another way can be to pay an additional EMI every year.
How prepayment works
If someone has taken a Rs 55 lakh loan at 10 per cent interest for 25 years, their total repayment amount will be Rs 1,49,93,562.
How prepayment works
But if the same person decides to make a prepayment of 10 per cent of the principal amount after 3 years into the loan, they will save estimated Rs 30,34,365 in interest, while the tenure will be shortened by 71 months.
Home loan calculations
For our home loan calculation, we will take the example of Rs 60 lakh loan, at 9.5 per cent annual interest for 25 years.
What will be home loan EMI?
The estimated home loan EMI will be Rs 52,422.
What will be interest and repayment?
The estimated interest will be 97,26,540, and the estimated repayment will be Rs 1,57,26,540.
Will there be some processing fee?
The processing fee for this loan can be Rs 30,000.
How will additional EMI be paid?
The additional EMI will be paid after completion of 3 years of the loan. If the loan started in December 2024, the first additional EMI will be made in January 2028. From then onwards, the borrower will pay an additional EMI every January.
How will it reduce interest?
The new estimated interest will be Rs 76,88,076, Rs 20,38,464 less than the previous interest.
Will it also shorten tenure?
The loan, which was about to finish in November 2049, will be repaid by March 2045, 56 months less than the scheduled time.