Home Furnishing Loan Prepayment

POSTED BY sumitanand84 ON March 14, 2013 2:14 pm COMMENTS (3)


I have a house refurningshing loan running for 2 years of the amount 2,50,000/- (approx.).

In 2 years time, the principal has only reduced by 30,000. I do understand that in the initial years of the loan, most of the EMI amount goes into the interest part.

Given this, i would like to make few prepayment of the amount by about 50,000 for now.

Will my EMI remain the same even the prepayment or do i have an option there?

Do i need to check or instruct the bank about anything in this case or simply make the payment?

3 replies on this article “Home Furnishing Loan Prepayment”

  1. sumitanand84@gmail.com says:

    Thank you for the answers.

    I think i will go ahead and keep the EMI same, thus, reducing the Interest outgo and Tenure.

  2. Dear Sumitanand, if you prepay 50K now, your loan ‘ll be reduced by that muc amount. If you keep EMI same, the loan ‘ll be over early. if you reduce your EMI, the loan ‘ll run for normal term. Take your pick. Personally keeping the same EMi is more favorable due to saving on interest outgo as more money on mly basis ‘ll go to repay loan.



  3. Credexpert says:

    Dear Sumitaanand,

    Yes, if you make a prepayment of about Rs. 50,000 then, the EMI will be recalculated by the bank and the tenure would also reduce.

    You could intimate the bank; however the next EMI will be automatically recalculated by the bank without intimation as well.


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