How To Reduce Home Loan Amount? Save Rs. 12 Lakh Interest on Rs. 40 Lakh Loan – Gyaani Mind
How much maximum loan we have to take and how much maximum interest we can save? These are one of the Most Common Questions in Everyone’s Mind.
Apart from this, if we do loan repayment, then how much interest we can save. It may also happen that after seeing the numbers, you will be shocked. In this blog, you will also be given a link to the EMI calculator made by AssetYogi so that you can easily calculate the EMI payment for your loans yourself. In this, if you put in Loan Amount, Tenure, Interest Rate and even all these for any loan, then you will get the right idea for the EMI Amount should be paid by you. All the information available here will help you Reduce Home Loan Amount and also save alot of money.
Table of Contents
That’s How People Decide To Take A Loan
Apart from this, it has also been seen that how do people decide to take a loan?
They see in which loan the minimum EMI will have to be paid. So, it happens that if you reduce the EMI amount, then the loan tenure becomes very long, due to which you have to pay more interest. You can also check this thing yourself by doing multiplication immediately.
For example, if you reduce the EMI of a Home Loan, then your tenure becomes 25 or 30 years. If you calculate it yourself, it will force you to think. Compare once you see Rs. There is a loan amount of 50 Lakh and an interest rate of 8% is charged on it. If you compare this loan once for 30 years and the second time for 15 years, then you will see how much difference comes in interest. After reading this article completely, you will have complete knowledge of how you have to do this calculation.
In this, we will also know how much maximum loan we have to take and how to save maximum interest?
Here it has been explained by taking an example of a home loan, because if its loan period is more, then the interest amount after some time becomes very high. Home loan tenure can be around 20, 25, or 30 years. You can use this calculator for the calculation of any kind of loan. This calculation is applicable for every loan.
How Much Loan Can Be Taken?
It completely depends on you how easily you can pay its EMI. Apart from this, it also depends on some other things like whether you already have any other loan or not whose EMI you are still paying. It is for you to decide how much EMI amount you have to pay or can pay.
There is also a Thumb Rule for this which tells you how much EMI you should pay. The total EMI of all the loans you have should be only up to 35% of your Monthly Salary, not more than that. For example, suppose that if your salary is Rs 1 lakh, then 35% of it i.e., EMI should not be paid more than Rs 35,000/- including Monthly EMI of all the loans.
You can understand this in such a way that if you have a car loan going on which EMI of Rs 5000/- is going and another personal loan is going on which instalment of Rs 4000/- is going. So in total, you have to pay a monthly EMI of Rs.9000/- already. So if you do 9000/- Minus out of 35000/- then EMI of Rs 26000/- can be filled more for Home Loan. According to that, how much loan can he get, according to the tenure, it can be calculated?
You can do all these calculations with the EMI Calculator. Click to download EMI Calculator and calculate EMI (Download EMI Calculator to calculate without any problem, do not make changes directly in Google Sheets).
EMI Calculator Link
Understand The Calculation To Reduce Home Loan Amount
Let us know how we have to calculate it. After opening the calculator in Excel, you can put any loan amount in it. Suppose you enter 40 Lakh, suppose the interest rate is 8%, then put 8% in front of the interest rate and if the loan tenure is 25 years, then you have to put 25 in front of the loan tenure. After entering all this, EMI up to Rs.30,000/- will come out. So the example we took, whose salary was Rs 1 Lakh, and he could pay EMI up to Rs 35,000/-. And suppose that he has taken a car loan whose EMI he is paying 5000/- then he can now pay EMI for any other loan up to Rs 30,000/ -.
From the 40 Lakh loan amount that was taken above, only about Rs 30,000/- has come out. This means that this person can take a loan of up to 40 Lakhs. This method and EMI Calculator will help you find and Reduce Home Loan Amount for recent and future Loans.
You Are Paying More Interest Than the Loan
Now let’s see how you can know the interest amount. Loan Amount 40 Lakh, Interest Rate if 8% is taken and Loan Tenure is assumed for 25 years, then after putting all this, the total interest will be calculated from Red Color. The interest amount which has come out here is Rs. 52 lakh, 61 thousand. More interest will have to be paid in 25 years than the loan is taken. The Pie Chart will show you the Principal Amount and Interest Amount payable.
Now if we reduce the loan tenure to 20 years by reducing 25 years, then the total interest amount will come to about 40 lakh 29 thousand. The more the loan, the more interest. But the thing to note is that by reducing only 5 years, the difference between saving and EMI of 12 lakhs directly will also be visible. Earlier it was 30,000/- now it is 33,000/-, the difference of only 3 thousand.
Here we saw that Saving 12 Lakhs became very easy, if he had not had the Car Loan whose EMI is paying Rs 5000/-, then he could have increased his EMI by only 3 to 4 thousand rupees, which is not so much. There would have been more beneficial in Interest Saving and how it reduce home loan amount.
How To Finish A Long Term Loan Quickly?
Now suppose that in today’s time he cannot pay EMI of more than 30,000/-, he also has EMI of a car after which he has no scope at all, he wants to take loan tenure only for 25 years, in that case, let’s see also.
Now, it is not that he will always earn the same salary, but the instalments of the loan are going to remain the same. Keep in mind that there is no inflation in the loan. Now when the salary increases, it can be filled in EMI, many times people get an Annual Bonus, they can fill it in EMI. Many times the Lump Sum Payment comes inside the business, so you can prepay the loan with it.
This will mean that you will be able to finish your loan before time, due to which you will be able to save a huge interest amount. For example, if by pre-payment of the loan taken above, you end it in 10 years instead of 25 years, then you can save total interest up to 20 lakhs.
But as much as we can pre-pay in the initial stage of any loan, then it will be beneficial to do the same, it will be that we will pay the principal amount to a great extent so that we will be able to save more in interest.
Advantange for Pre-Payment in a Home Loan
One of the biggest reasons for pre-payment is that if you have taken a home loan, then you can call that house your home. Because until you make full payment of the loan, the bank has the same right to it as you do.
Suppose that due to any reason there is a risk on your job or business, and you are not able to make full payment of the loan, then the bank will put your house directly in the auction, in which the house can be sold for less than the market price.
With this, the bank will first recover its amount and after that, if there is a little left, then it will give it to you. That is why try to become the owner of your goods by clearing your loan as soon as possible by paying lesser amount (reduce home loan amount).
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