444444Reducing EMI is not a smart option. Hence skipped altogether.

Smart option is discussed in an interesting way. Join the discussion smartly.

Home loan of 36,00,000 at 8.5%, 360 months, EMI.

How to reduce the period to 220, by extra remittances?.

1. By reducing the liability at 50%, i.e. 18,00,000 at the end of 140 months.
2. Thereafter, fixing an EMI such that the loan gets cleared in in the next 80
months.
Do your Maths, yourself, and fix your EMI, your own way.

The EMI for the Home loan is 27680.88

How to find the value of EMI to reduce the liability to 18,00,000, by the 140th month?

The liability of home loan of Rs.3600000 at 8.5% at the end of 140 months is

We need an EMI , which is( 27680.88 + x), by which, the liability of the loan is made
18,00,000 at the end of 140 months.

Step1.

The start liability is 36,00,000. The target liability is 18,00,000 at the end of 140 months.

a) Find the difference of START liability and TARGET liability, i.e. 36,00,000 - 18,00,000 =
18,00,000.

b) Find the monthly interest on this amount, as 18,00,000 X 1/12 X 8.5% = 12750

c) Find the EMI of 18,00,000 at 8.5% for 140 months, it is 20310.85.

d) The EMI which bring the liability to 18,00,000 at the end of 140 months, add (b) and(c) i.e.
12750 + 20310.85 = 33060.85

e) value of extra remittance x = 33060.85 - 27680.88 = 5379.97, or 5380.

As a proof, examine the screen sheet of the values of EMI for the last 6 months of period
ending, 140th month.
We have brought down the liability to 18,00,000 by choosing EMI of 27680.88+5380=
33060.85.

STEP 2.

Step 2 is simple. Just look for the EMI of 18,00,000 for period of 80 months

It is just 29551.39

Thus the EMI for the period 141 to 220 months is 27680.88+1870.51=29551.39.

Thus we can accept the home loan of 35,00,000 at an EMI of 27680.88 for 360 months .

And we can choose our dual step EMI,

First step of 140 EMIs of 33060.85 and,thereafter,

Second Step of 80 EMIs of 29551.39.

33060.85x 140, 29551.39x 80, total 220 months.

Other combinations,

Let us try values for 125 and 65 months, 190 months.

1st step EMI:

12750 + 21751.43= 34501.43 for 125 months, and ,thereafter,

34651.03 for 65 months , total 190 months.

We can have many other combinations for reducing the tenure.

Hope by now, you are happy with the concept.

Try other combinations:

150 + 75 = 225 months.

130 + 70 = 200 months.

For all such options, the monthly interest figure 12750 is a common value.

The above is a general guidance, by which, we can reduce our tenure of Home Loan, by
choosing the 2 steps, our own way, thus saving a lot of money.

Once chosen, we need to explore how to plug in the extra remittance.

Now it will only be wise, if funds like 1000, 2000, 500, 10000, are added at random
dates.Such gestures will amortise the loan on a fast track.

Note:

Some Banks, like ICICI bank, allows to change EMI through online. Maybe only
increase the value. Explore this feature in your bank.

Do some maths, and save money smartly.