Home Loan Prepayment Calculator Guide

We try to provide you the best loan calculator. But what makes a loan calculator good for its users?

 

A loan calculator’s utility is substantially enhanced by incorporating the functionality of prepayment.

This blog not only offers a good home loan prepayment calculator but also a researched, in-depth write-up.

 

This blog explains in detail the concept & benefits of home loan prepayment. One can save large sums of money if prepayment is done timely.

 

Why use a prepayment calculator?

 

Prepayment calculators help in estimation of potential savings. Exemplifications coupled with great software makes this home loan calculator a rare find on internet.

 

Let’s take an example. Suppose one took home loan with tenure of 20 years…

 

 

In this tenure total interest payable will be 1.4 times of principal (@10.5% p.a.). Means, if home loan is $100,000, total interest payable will be $140,000. Total payment to be made by the borrower will be $100,000+$140,000 = $240,000.

 

So what’s the problem, if we take loan we must pay the interest. What’s the big deal?

 

It’s important to realize this. One took loan of $100,000. Repayment of these $100,000 is not a problem. The problem is with the high interest payment (140% of principal).

 

All $140,000 that one pay as interest is EXTRA COST. We must do everything to reduce this extra cost.

 

If one understands this concept and also use a good home loan emi calculator, huge savings can be made.

 

Home loan prepayment calculator provided here can help us to both visualize the problem & save lots of money in interest.

Interest paid by the borrower is the profit for the banks. Banks would like us to continue paying interest till eternity.

 

It is in our benefit that we shall find ways to reduce OUR interest burden. And we can do it only if we get aware of our interest burden.

 

We are providing here an EMI calculator with home loan prepayment functionality enabled.

 

What this home loan prepayment calculator does?

 

What this calculator does best is make people aware about the potential savings they can do with every dollar of prepayment.

 

What is the worse part of interest payments? Even if we continue paying interest for next 100 years, the loan burden will not reduce even by one dollar.

[Source: http://www.getmoneyrich.com/home-loan-prepayment-guide-india/]