Home Loan Interest Saving: How you can save Rs 16.40 lakh on Rs 50 lakh home loan by increasing EMI amount by 5.41%?
Save Rs 16.40 lakh on a Rs 50 lakh home loan by increasing your EMI by just 5.41%. Learn how shorter tenure can help reduce interest outgo significantly.
Home Loan Interest Saving: Home loans with long tenures can lead to excessive interest payments, increasing the overall loan burden. However, a simple strategy—raising your EMI by 5.41%—can help you save Rs 16.40 lakh in interest. This article explains how shorter durations and small EMI increases can lead to substantial savings.
Long tenure increases interest outgo
Home loans with longer tenures lead to significantly higher interest payments. A shorter tenure reduces the total interest paid.
Shorter tenure saves interest
Opting for a shorter repayment period lowers the total interest amount, even though it increases the monthly EMI.
Increase EMI for faster loan repayment
Raising your EMI by 5.41% can help you clear your home loan faster and save a substantial amount on interest.
Borrow for a shorter period
Opting for a shorter loan tenure instead of a longer one significantly reduces the total interest outgo, helping you clear your home loan faster and save money.
One extra EMI can reduce tenure
Paying one additional EMI annually can cut down the loan tenure and reduce interest payments significantly.
Choose a shorter loan tenure
Instead of opting for a 25-year loan, choosing a shorter tenure like 21 years can help you save lakhs in interest and become debt-free sooner.
Standard home loan calculation (Rs 50 lakh, 25 years, 9.5% interest)
- Monthly EMI: Rs 43,685
- Total Interest Paid: Rs 81,05,450
- Total Amount Paid: Rs 1,31,05,450
How Increasing EMI by 5.41% helps
By increasing EMI to Rs 45,872 and reducing tenure to 21 years, you can save Rs 16.40 lakh in interest.
Revised home loan calculation (Rs 50 lakh, 21 years, 9.5% interest)
- Monthly EMI: Rs 45,872
- Total Interest Paid: Rs 65,59,673
- Total Amount Paid: Rs 1,15,59,673
Final savings on interest outgo
By reducing tenure from 25 to 21 years, you save Rs 16,39,789 in total interest payments.