Understanding and Using EMI Calculators with Prepayment Features

When it comes to buying a home, vehicle or any major purchase, financial planning becomes very necessary. Then the question comes how do you plan your finances? In such cases, an EMI calculator with a prepayment feature is an invaluable tool for calculating monthly payments and visualising the benefits of prepaying your loan.

Let’s break down how to understand and effectively use this prepayment calculator.

What’s an EMI?

Before going to what the benefits of prepayment are, let us understand what is an EMI. An EMI is a fixed monthly payment that you make to your lender until the loan is fully repaid. This amount comprises both the principal (the original loan amount) and the interest calculated on the outstanding principal.

What is loan prepayment?

Prepayment of a loan is paying an amount that is above EMI so as to reduce the principal amount, resulting in paying off the loan early.

Now, the question that comes in is, how will prepayment affect my EMI?

Prepayment beyond your regular EMI helps you directly reduce your principal amount. So, even if it is a small amount, regular prepayment can help you pay off your loan early. Through prepayment and partial payment, you can choose either a reduction in your loan EMI or loan tenure.

Introducing the HomeFirst Auto Prepay Feature

While other financial institutions may look at prepayment in lump sum amounts only, HomeFirst offers you an auto prepayment feature. This feature allows you to pay even as small amount as ₹500 above your EMI. This amount gets deducted from your account automatically every month.

What is a home loan prepayment calculator?

A home loan prepayment calculator helps you understand the savings which you can make on the interest amount when you make a prepayment on your home loan. Well, you just need to put in your basic loan details like loan amount, loan tenure, rate of interest and prepayment amount. With just these basic details, you get the potential savings that you can do on your loan amount.

Check out HomeFirst’s Auto Prepay Calculator here.

How to Use HomeFirst Auto Prepay Calculator?

HomeFirst Auto Prepay Calculator is absolutely easy to use.

You can just adjust the details like Loan Amount, Interest Rate and Loan Tenure. Also, put in the auto prepay amount that you are willing to pay above EMI every month. After this, you will get the result with the number of EMIs saved and the reduced tenure.

What are the benefits of HomeFirst Auto Prepay Calculator?

There are several benefits of using HomeFirst’s Auto Prepay Calculator-

• Savings in small amounts- Even with an amount as low as ₹500, you can utilise your money towards savings in your loan.

• See Reduced Loan Tenure- The calculator demonstrates how prepayments can shorten your loan payback tenure. You can input fields like remaining loan amount, tenure, interest rate and the auto prepay amount that you are willing to pay above your EMI amount.

• Saving on Interest Amount- With Autoprepay, there are overall savings in terms of the interest paid as the amount is directly subtracted from the outstanding principal amount.

Also read:

Benefits of Home Loan EMI Calculator

Missed Home Loan EMI Payment?

How To Reduce Home Loan EMI?

Tips to Increase Your Home Loan Eligibility

Home Loan Eligibility Calculator: Check Housing Loan Eligibility

Home Loan EMI Calculator: Know Your Home Loan EMI