Taken housing loan 0f Rs 4 lkh paid amt1.5 lkh in which only 38000/- is deposited as principal restis interest
Question:i want 2 know what is interest rate, is it is annual or monthly. for how long i will pay this amont, my EMI is 3844/- for 15 yrs. i m not able 2 understand how only 38000/- is deposited as principal and rest amont around 01 Lkh is taken as interest in the last three years. PLZ give me correct guidelines to pay the rest all amont.
Answers:
you r in the wrong category. trp posting it in finance section to get better results..
dear friend,
as per details given by you the interest rate charged is approx 8.10 % on reducing balance ( this is quite a good reasonable interest as current interests are higher)...banks always recover interest 1st from the emi paid so that there business & returns are safeguarded.
eg : in the 1st emi the amount adjusted towards interest was rs 2700 & 1146 towards principal & when your last emi comes it will be reverse eg : interest will be Rs 24 & principal 3820 ...thus it always makes sense to prepay as much as you can in the 1st 6 years of your loan so that you reduce the interest burden....
having said that it appears this is your 2nd year of loan so whenever you get any extra money go to the bank & prepay that amount which willadjusted towards the principal by your bank thereby your interest burden will be reduced, once you have crossed 6 - 7 years it is better to continue with the loan as most of the interest has already been collected by the bank.
You are paying 3844/- per month, on a 400,000/- loan.
This is how it is done.
Every month you have some interest and some principal to pay.
As you pay the principal, the next month you will have less interest on the remaining balance so more goes towards the principal and rest is the interest, so in last 3 years you have paid 38000/- in principal, rest was interest ( 01 lkh).
In 15 years every thing will be paid off. The house will be yours.
"noname273" said it is a 8.1% 15 years loan.
You said Your payment is 3844/- and I hope both are correct and the payment does not have taxes and Insurance included in it.
40000 x .081 = 32400 is the interest for year so for that month it is 32400/12 = 2700.is the interest
So 2700 for interest and 1144 for principal = 3844 is your pay ment it will not change.
But next month the principal will be 400,000- 1144 = 398,56
Now the interest for that month is 398,56x .081 = 32307.336 for the year
so for that month it is 32307.336/12 = 2692.278 is the interest.
This is less then the previous month so more money is applied to the principle.
The bank must have given you a table with this calculation if not you can request it. May charge you a fee.
But you can make your own table by calculating, if you can understand my calculations.
You will have to do the calculations 15 x12 = 180 time.
Your last payment may not be the same as 3844/- it will be more or less but if this is done using a math formula(exact figure) then it will be also 3844/-
My quick calculations shows that your bank's figures are correct it is a matter of understanding the calculations.
So be happy.
PS:
This is your 4 th year. "noname273" has few typographical error. But in general he is right.
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