Team-BHP - View Single Post - ARTICLE: How to get the lowest EMI & the best Finance Deal

squarecut · 24th May 2007, 15:57

EMI is fixed. Do not mix it with prepayment.

Typically, once you have a nice figure , say Rs 50 thousands or one lakh available with you, you go to your bank and make a prepayment of this amount towards your loan. That way, your principal outstanding comes down by 50 thousands or one lakh, as the case may be. With the amount of principal outstanding thus coming down, the interest component of your future EMIs comes down considerably.

The caveat is that this works only in case of PSU banks, where there are no hidden clauses and no underhand dealings. This procedure will work fine with say SBI, but ICICI will find ways to rob you, in the form of prepayment penalties etc.

24th May 2007, 15:57	#47 (permalink)
squarecut BHPian Join Date: Feb 2007 Location: Jabalpur Posts: 80	EMI is fixed. Do not mix it with prepayment. Typically, once you have a nice figure , say Rs 50 thousands or one lakh available with you, you go to your bank and make a prepayment of this amount towards your loan. That way, your principal outstanding comes down by 50 thousands or one lakh, as the case may be. With the amount of principal outstanding thus coming down, the interest component of your future EMIs comes down considerably. The caveat is that this works only in case of PSU banks, where there are no hidden clauses and no underhand dealings. This procedure will work fine with say SBI, but ICICI will find ways to rob you, in the form of prepayment penalties etc.