How to Customize Your Home Loan Repayment Schedule?

When it comes to repaying your home loan, there are different strategies you can use. One of the most customizable ones is the EMI (Equated Monthly Installment) strategy. This involves dividing your loan into equal monthly payments that include both principal and interest. The EMI amount is calculated based on the loan amount, interest rate, and loan tenure. Here’s how to calculate it and customize your home loan repayment schedule.

Step 1: Calculate your EMI

There are many EMI calculators online that can help you calculate your monthly payments. You’ll need to input the loan amount, interest rate, and tenure. For example, if you have a loan of Rs. 30 lakhs, at an interest rate of 8.5% and a tenure of 20 years, your EMI will be around Rs. 26,775.

Step 2: Customize your EMI schedule

Once you have calculated your home loan EMI, you can customize your repayment schedule according to your financial situation. For example, you can choose to increase your EMI amount if you have a higher income or a lump sum amount to repay. This will help you repay the loan faster and save on interest. Alternatively, you can opt for a lower EMI if you want to reduce your monthly expenses or have other financial obligations.

Another aspect you can customize is the frequency of your EMI payments. You can choose to make monthly, bi-monthly, or quarterly payments, depending on what works best for your financial situation. Making more frequent payments also helps reduce the overall interest you pay.

And finally, you can also choose to prepay your loan amount whenever you have surplus funds. This helps reduce the loan principal and thereby reduces the overall interest you pay. However, some lenders may have prepayment penalties, so it’s important to check with them before making any prepayments.

Conclusion

In conclusion, customizing your EMI schedule is a great way to manage your home loan repayment and save on interest. By calculating your EMI, customizing your payments, and prepaying your loan amount, you can be debt-free sooner than you think!