A "low interest" loan shouldn't mean you have very little interest in paying it back!
Use home loan prepayment calculator to check the EMIs in case you wish to prepay a portion of the home loan. Basic details such as the prepayment amount, interest rate, tenure, and loan amount must be entered to calculate the EMIs. The amount of money that you will save can also be checked by using the home loan prepayment calculator.
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Banks and Non-Banking Financial Companies (NBFC) offer the prepayment facility on home loans, where a certain portion of the loan amount that you have availed can be repaid. Making a prepayment helps in reducing the amount that is due.
When you make a prepayment, the EMI can be kept the same and the tenure can be reduced or the tenure can be kept the same and the EMI can be reduced. You can use the home loan prepayment calculator to check the exact details.
Some of the details that must be entered to use the home loan prepayment calculator are mentioned below:
Find: Different Types of Loans in India
The home loan prepayment EMI calculator is offered by various third-party websites. You will need to enter details such as the loan amount, tenure, rate of interest, and the amount you would like to pay. Once the details have been entered, you can view the revised EMI, the EMI savings, the percentage of the EMI that is being saved, and revised tenure.
Let’s now look at how this tool works. We’re assuming the following numbers to illustrate this:
Loan amount (principal) = Rs.20 lakh
Tenure = 20 years
Interest rate = 9% p.a.
Using an EMI calculator, you will see that your EMI without any prepayment is Rs.17,995.
Now let’s say you make a prepayment of Rs.1 lakh. Your EMI now will be Rs.17,095. That’s a reduction of Rs.900 every month (5% EMI savings). You can also choose to keep your EMIs at Rs.17,995 and reduce your tenure.
Using this calculator can help you find out how you can pay off your loan a lot faster.
As per a circular that was issued by the Reserve Bank of India in 2014, there are certain prepayment rules that banks must follow. Housing Finance Companies (HFCs) have also followed similar rules.
HFCs and banks are allowed to levy prepayment penalties under the below-mentioned cases:
HFCs and banks are not allowed to levy prepayment penalties under the below-mentioned cases:
A home loan EMI calculator can help you find out the monthly payments of the home loan that you are planning to avail. A prepayment calculator helps you to find the monthly payments after a certain portion of the outstanding amount has been paid. The prepayment calculator can also help you find the amount of money that can be saved.
Home loan repayment is when the entire loan is paid, while prepayment is when part of the outstanding amount is paid.
Yes, part payment can help in either reducing the tenure or the EMI.
Yes, part payment reduces the EMI on the home loan.
Any home loan borrower is eligible to opt for the prepayment facility. However, you must check with the bank if the prepayment facility is provided when you avail the home loan.
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