Showing posts from December 29, 2019

Planning for Home Loan Prepayments

In the last post we have discussed the importance on making loan prepayment early on, as “ Nearly 75%-80% of the EMI goes towards purely towards the interest during the first 3-5 years of your loan ”. But the main question how to plan for prepayments when you are already paying the home loan EMI?  Be Smart, plan for it! While there is no direct answer to this question, but there definitely are a few ways in which it can be achieved. 1.        Create a RD towards accumulating the prepayment amount You must have heard about Recurring Deposit which is commonly known as RD. RD is a unique term deposit offered by all the banks which offers flexibility and ease of investment to users. Most of the banks offers RD for a term of a few months to 10 years. You can invest even smaller amounts like 1000 Rs to start with and it also allows premature withdrawals if required. I suggest creating a RD for a period of 12 months’ worth a maturity value that is equal to or more than

Home Loan(er) to Home Home Owner!

Have you ever wondered while paying home loan EMIs,  “Are you the owner of your house or a loaner?”    Do you know how much you end up paying over the years in EMIs to your bank for the loan you have taken? Isn’t there anything you can do about it?  Home Owner Lets understand this trivia which is simply called as  “Home Loan or Mortgage!" Do you know, how much you are paying? Have you ever imagined; how much you will end up paying for a loan taken to buy your dream home over a period of 20 years?  How much you are paying? There are many EMI calculators available online. I have used the one available on  to calculate the amount one will end up paying for a loan amount of ₹ 50,00,000/- @ 9.00% interest for a term of 20 years. And the results are Loan Amount ROI Term (Years) ₹ 50,00,000 9.00% 20 Total Payment* Interest & Charges EMI ₹ 1,12,29,160 ₹ 62,29,160