When it comes to repaying housing loans, the thought of being debt-free can be exciting. However, prepaying your home loan can be a daunting task if you are not aware of the right way to go about it. Fortunately, there is a home loan part pre payment calculator that can assist you in understanding the nuances of the process. It can help you determine how much you can pay towards the loan, how many prepayments you can make, and how much you could save. In this article, we will explain how to effectively use the home loan part pre payment calculator to get the most accurate results.
Before we delve into the nitty-gritty of using the home loan part pre payment calculator, let us understand what repo rate is. Repo rate is the interest rate at which the Reserve Bank of India (RBI) lends money to commercial banks. This is an important factor to consider because any change in the repo rate has a cascading effect on the interest rates of loans disbursed by banks and financial institutions. Hence, whenever there is a change in the repo rate, you need to be updated about it so that you can make an informed decision about prepaying your home loan.
Now, coming back to using the home loan part pre payment calculator. The first step is to find a reliable calculator online. There are several websites and apps that offer this tool, and one of the best in the industry is Navi’s home loan prepayment calculator.
Once you have accessed the calculator, you will be asked to enter some basic information such as the loan amount, the current interest rate, and the loan tenure. You will also be asked to enter the prepayment amount, the frequency of prepayments (e.g. monthly, quarterly, half-yearly) and the date of your first prepayment. It is important to note that you must enter accurate details to get the most accurate results from the calculator.
After you have entered all the necessary information, click on the ‘Calculate’ button. The calculator will instantly provide you with information such as the total interest payable, the total cost of the loan, and the new loan tenure after making prepayments. You can then adjust the amount of prepayment and/or the frequency as needed to see how it impacts the loan repayment amount.
What’s more, is that you can also generate an amortization schedule that shows a breakup of your loan repayments. It is an essential tool to keep track of your monthly payments, the principal amount outstanding, and the interest paid on the loan. It also helps you understand the impact of prepayments on your loan repayment amount.
Now that we have understood how to use the home loan part pre payment calculator let us explore some benefits.
One of the most significant advantages of using a home loan part pre-payment calculator is that it helps you save money on interest payments. It enables you to visualize how much you will save on interest payments if you make prepayments on your loan. Additionally, by paying off the loan faster than the designated tenure, you can also save money on interest charges that you would have otherwise paid.
The calculator is a valuable tool that helps you decide whether or not you should prepay your loan. It assists you in finding out how much you can save on interest payments, and the cost-benefit analysis of prepaying your loan. This means you can make an informed decision about prepaying your loan, rather than just blindly following someone else’s advice.
Conclusion
In conclusion, the home loan part pre payment calculator is an excellent tool to calculate your loan repayments, the total interest payable, and the new loan tenure after making prepayments. It helps you save money on interest payments, make informed decisions about prepaying your loan, and demystifies the repayment process by providing detailed information about loan repayments.