About three years ago, the interest rate on home loan in the market was around seven percent, which has increased to 9.50 percent today. That means the interest rate has increased by 2.5 percentage points. Due to this the entire budget of the loan holders has been spoiled. But today’s story is about a simple advice. Let us know about it in detail.
If you have taken a loan of Rs 35-40 lakh, then you can save up to Rs 16 lakh on it. That too, you do not need to spend any lump sum amount for this. Rather, if you reduce your expenses by Rs 100-120 daily, you can get this benefit.
This is not just a matter of fact but it is completely true. According to a report, so much money can be saved if the loan holder is a little stingy in his daily habits. This small amount of money gives you huge benefits in the long run. The newspaper has explained this entire mathematics through Adil Shetty, CEO of Bankbazaar.com. It has been said in this report that if you want to become debt free soon and pay minimum interest on the loan amount, then be a little frugal in your expenditure pattern.
According to Shetty, if you had taken a home loan of Rs 50 lakh at 7 percent interest rate, then your EMI at that time would have been Rs 38,765. You had to pay interest of Rs 43.03 lakh on a 20 year loan. If you had paid one installment in advance as soon as you started this loan, you would have saved Rs 1.15 lakh in interest. Shetty further explains that the only way to get early repayment of home loan or any loan is its prepayment. Whatever money you have left, you should prepay it. You will see its widespread impact.
Savings of Rs 11.73 lakh from one additional EMI
Shetty has also explained this through a graph. He has done all this math on a home loan of Rs 40 lakh. He has told that if you pay one additional EMI every year, you will save Rs 11.73 lakh in interest on the loan. With this, your loan will end in 16 years and one month.
Similarly, if you pay an additional Rs 50,000 every year in addition to the fixed EMI on a loan of Rs 40 lakh, then there will be a saving of Rs 14.47 lakh in interest and your loan will be exhausted in just 15 years earlier than five years. Continuing the same pattern, if you make an additional payment of Rs 1 lakh every year, you will save Rs 22.18 lakh in interest and your loan will end in 12 years and two months.
Then if you increase your EMI by five percent, then there will be a total saving of Rs 7.33 lakh in interest and the loan will end in 17 years and six months. Then if this five percent is increased to 10 percent, then this saving will be of Rs 16.89 lakh and your loan will end in 14 years and one month.
There will be a saving of Rs 16 lakh on a home loan of Rs 40 lakh, with Rs 100 every day you will become debt free in 6 years.
You will get freedom by saving ₹ 100 daily!
Now coming to the point. If you have taken a loan of Rs 40 lakh, then as of today, its EMI at the interest rate of 9.25 percent is Rs 36,635. If you increase it by 10 percent i.e. Rs 3663, then you will save Rs 16.89 lakh on total interest. You will have to pay such less interest. Now the question is where will Rs 3663 come from every month.
If you divide Rs 3663 on a daily basis, it comes to Rs 122 per day. Saving so much money from daily expenses is not easy but not very difficult either. If you make this saving, you will soon be free from the pressure of loan and will also be successful in saving a huge amount.
