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POSTED BY ON May 31, 2014 10:02 am COMMENTS (2)
Hello !
Home Loan Amount: 20 Lakhs @ 10.5% , 20 years.
I have a home loan of 20 lakhs. The EMI started in Feb 2013. I have been paying an EMI of 20k monthly since Feb 2013.
I want to know:
1. Is there any limit to which I can increase the monthly EMI.
2. After increasing it for some time (few months or an year), Can i decrease it?
I want to increase the EMI to 1 lakh per month for an year. Please suggest if it is a wise option or shall i wait for an year or few months to deposit lump sum amount. For a certain period (about 1 year) I can save 1 lakh monthly for EMI.
Thank You !
AB
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Since there is no penalty on pre-payment of home loan, therefore bank should not object to increasing your EMI. The additional amount that you pay over and above your actual EMI shall be considered as Principal repayment and that much amount can directly be adjusted from the outstanding principal.
In case bank does not allow this, you may ask for monthly lumpsum pre-payments, which is the same as above case. Just that you have to make payment every month separately instead of along with EMIs.
Since bank is going to loose out on overall interest, they may suggest you to invest the additional amount in some other instruments and continue with regular EMI (to avail tax benefits). You may choose as per your plan. I suggest if you are not looking at Tax benefits and planning to close your loan early, then make lumpsum payments every quarter or so.
1. I think EMI can be adjusted by talking to the bank as per your convenience.
2. I think this also can be done. Just please inquire with your bank once.