A Small Change in Home Loan EMI Can Save You Up to ₹18 Lakh—Here’s the Full Calculation

By Siddhi Jain | Dec 9, 2025, 20:09 IST

Most homebuyers assume that once they take a home loan, they are locked into paying EMIs for 20 to 30 years. Month after month, a fixed amount goes out of their salary, and a huge chunk ends up as interest. But experts say that a simple change in the EMI payment pattern—without increasing the EMI amount—can help borrowers close their loan years earlier and save lakhs in interest.

According to tax and finance expert CA Nitin Kaushik, modifying the way you repay your EMI can reduce the loan tenure by 5 to 7 years and cut total interest payout by ₹12 lakh to ₹18 lakh, depending on the loan size and interest rate. The best part is that this method does not require renegotiating with the bank or increasing your monthly EMI.

How This Easy EMI Trick Works

Kaushik calls it the “quiet home-loan hack”. The idea is simple:
Instead of paying one EMI every month, you pay half the EMI every 15 days.

This does not increase the total monthly burden, because you are still paying the same total amount in 30 days—just in two smaller installments.

Why Paying Every 15 Days Makes a Huge Difference

Most borrowers pay 12 EMIs per year, one each month.
But when you pay half EMI every 15 days, this adds up differently:

26 half-EMIs in a year = 13 full EMIs
Meaning, without realizing it, you end up paying one extra EMI per year.

This extra EMI goes directly towards reducing the principal, not interest.
And since the principal reduces faster, the interest charged each month also falls quickly—creating a compounding effect.

How Much Can You Actually Save?

Let’s take a common example:

Home loan amount: ₹50–60 lakh
Interest rate: 8–9%
Normal tenure: 20–25 years

With biweekly half-EMI payments:

Loan tenure reduces by 6–7 years
Total interest saving: ₹12 lakh to ₹18 lakh

This saving happens without changing your EMI and without increasing your financial burden.

Why Does the Interest Reduce So Much?

Interest on home loans is calculated on the outstanding principal.
So the sooner your principal reduces, the less interest you pay.

By splitting the EMI:

Principal drops twice a month instead of once
Interest is calculated on a smaller balance
Total interest outflow reduces significantly

This is the same reason why prepayments—even small ones—make a big difference over long tenures.

No Need to Modify Loan Terms

One of the biggest advantages of this method is that borrowers do not need:

To change their EMI amount
To request a new interest rate
To apply for a loan restructuring

Only the timing of payment changes, not the amount.

Check With Your Bank First

However, not all banks offer a biweekly EMI facility. Many lenders still follow the monthly interest calculation cycle.

So before adopting this method, borrowers must confirm:

Whether their bank allows half-EMI payments
Whether biweekly payments attract any charges
How the bank applies principal reduction

Even when banks follow monthly interest calculations, the quicker reduction in principal still results in lower interest payout over time.

If Biweekly EMI Is Not Allowed—Use This Alternative

If your bank does not allow 15-day EMIs, the next best and universally effective strategy is:

❖ Make at least one extra EMI payment every year

This single extra EMI:

Directly reduces the principal
Automatically cuts interest
Shortens the loan tenure by several years

Borrowers can use:

Yearly bonus
Tax refunds
Increment arrears
Festive bonus
Savings from salary hikes

Even one additional EMI annually has a major impact over a 20–30 year loan.

Final Tip: Ask the Bank to Reduce Tenure, Not EMI

Whenever you make a prepayment, always request the bank to reduce the loan tenure instead of reducing the EMI.
A smaller tenure leads to dramatically higher savings compared to a reduced EMI.