Home loan burden will be reduced; save Rs 12 to 18 lakh on a Rs 50 lakh loan; experts reveal the trick..
If you're tired of paying off your home loan and wondering when this burden will finally end, there's good news for you. Chartered Accountant Nitin Kaushik has revealed a trick that can help you save a significant amount, between ₹12 and ₹18 lakhs, on a home loan of ₹50-60 lakhs. The best part is that this method is neither difficult nor requires any significant extra income. A small change in how you pay your EMIs can help you save years of interest and pay off your loan faster.
Why are home loans so expensive?
The biggest problem with home loans is the long tenure and high interest rates. You take a loan of ₹50 lakhs, but by the time you pay it off, the amount paid to the bank reaches around ₹1 crore. This is why people often end up paying EMIs for 20-30 years, and a large part of their life's earnings goes towards interest. But with a little smart planning, the burden of interest can be significantly reduced.
Expert Advice: Split your EMI, reduce interest
Nitin Kaushik explains that most people pay their EMI once a month, which means 12 EMIs a year. The trick is to split one full EMI into two halves and pay half the EMI every 15 days.
The simple math is that this adds up to one extra EMI. If you pay half an EMI every 15 days, you end up paying 26 half-EMIs in a year, which is equivalent to 13 full EMIs. This means that without any extra burden, you pay one extra EMI every year. This extra EMI goes directly towards your principal amount. This reduces your loan balance faster, and the interest also starts decreasing rapidly.
How much can you save on a ₹50 lakh loan? If your loan is between 50-60 lakh rupees and the interest rate is between 8-9%, the loan could be paid off 6-7 years earlier, and you could save approximately 12-18 lakh rupees in interest. This means not only will the burden of EMIs end sooner, but you will also save millions of rupees over your lifetime.
Does every bank offer this facility?
Before using this trick, check your bank's policy, as not all banks offer the option of making payments every 15 days. If your bank offers bi-monthly or part-payment facilities, this method can prove to be extremely beneficial for you.
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