I have taken loan from bank rs.10 Lacs @ 10.5% interest for 240 months tenure since last 12 emis had been already paid.
now i want to make prepayment of loan Rs.1 Lac upto 4 year along with monthly emi to make it outstanding loan balance rs.6 lac
my question is that whether over all intesest payable through out the tenure will be reduced to much extent or it will no impact on total interest payable.
pl. some one suggest if any better option to complete loan outstanding as earlier.
If you do prepayment then definately your interest will be reduced. Simply you are paying interst on 10Lac @ 10.5 around (1000000*10.5/100) 105000/-
After doing prepayment your interest for next 12 months will be (900000*10.5/100) = 94500/-
next will be (800000*10.5/100) = 84000/-
next will be (700000*10.5/100) = 73500/-
next will be (600000*10.5/100) = 63000/-
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
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