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POSTED BY ON June 4, 2013 7:40 pm ONE COMMENT
Sir I have a Home Loan of Rs.7,00000 from SBI Bank. I want to close this loan as early as possible suggest me some tips for closing the account whether it will be better to keep 15,000 as EMI for a period of 8 years.I want to give less interest to bank. If i keep Rs.10,000 as EMI for a period of 10 years the total amount will be 12,00000 that means Rs.5,00000 as interest to Bank. I dont want to give Rs.5,00000 to Bank as interest.Please help me out Sir.
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Dear Ashik, how about thinking reverse. If bank accepts FD from you & do not want to pay any interest on it? is it possible? The answer is NO. As you have taken a loan, you w’d have to pay interest on it. Now as you do not want to pay interest, the only option with you is to prepay NOW.
Now think on a different path. You are paying 5L or 7L Rs. as interest over the period of your loan term but are you paying the same value of money? Due to impact of inflation, the amount you are paying each month as EMI is fixed but it’s value is eroding month by month. So in a sense, it’s a good idea to continue with your EMI.
You can do one more thing. Just calculate what ‘ll be the maturity value of an RD of excess amount if you do not pay higher EMI?
I ‘ll wait for your reply.
Thanks
Ashal