Home Loan Trap? Not Anymore! Part 3 - Mission Accomplished

Hey All,

For the past 10 days, I have been working diligently to execute the plan I had framed and shared here on the HIVE community. A strategy to mitigate the Home Loan Trap to some extent by making a prepayment towards my ongoing home loan. I had shared two reference posts earlier, and this post serves as the final and closing update, where my mission to save on interest has been successfully accomplished. As a result, I’ve managed to save ₹57+ Lakhs (approximately $66K+), which feels like a huge accomplishment provided that disciplined planning and action can lead to extraordinary savings. Remember I had been saying this for quite some time that planning without execution is of no use. If you’ve got a plan, make sure you back it up with action, because only execution turns ideas into results.

My Home Loan Status Before Making Pre Payment

Now if you compare the above image with the image at at the starting of this post which says - "Mission Accomplished" you can clearly see the difference in the balance EMI [Equated Monthly Installment] to be paid now. From where it was before pre payment of Rs. 20 lakhs i.e. 190 Months it has now been reduced to 118 Months which means I saved on 80 Months EMI which is Rs.57+ Lakhs $66K+ dollars. How? Here is the quick math...

My EMI is roughly is Rs.72 Lakhs; Saving of 80 EMI means

Total Interest Savings = 80 * Rs. 72000 = Rs. 57+ Lakhs

While paying the pre payment I ensured to tell my banker that I want the tenure of my Home Loan to be reduced and not the EMI component and hence the saving on the interest is on the higher side. So now what Next? Now that I have made one big prepayment, my next goal is very clear. I want to close my home loan early. To be honest I want to get rid of this home loan as quickly as possible and for that reason I do plan to do the pre payments like this once every year and if I am able to do so consistently then this should get me paying off my home debt within 3 Years or so. Will I be able to do it is a separate question to answer but for now that is the plan and I will be working through it to ensure that more pre payments are being done and I save on the interest component. Ok this should be it for todays post on - "Home Loan Trap? Not Anymore! Part 3 - Mission Accomplished - Saved Rs.57+ Lakhs $66K+ In INTEREST... " Let me know your views on my Home Loan Trap? Not Anymore! Part series and do you also consider making part payments for your loan or do you prefer sticking to regular EMIs and using your surplus funds for investments or other financial goals?.. Cheers...

#HomeLoan #LoanRepayment #PrepaymentStrategy #EMISavings #HomeSaverLoan #LoanTenureReduction #FinancialPlanning

Best Regards
Paras