Quote:
Originally Posted by squarecut  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. |
The SBI has prepayment penalties , 2 % of the outstanding principal , dunnow about partial repayments but mind you it is much lower than the other banks out there !!
@tsk - as square cut said the EMI's get fixed once you take the loan , but i can suggest another way out .Go to the bank , take a loan of the original stipulated amount . Initially give out pdc for only 12 months or less .After a year or so if u have say Rs 50k or 1 lac in hand pay that amount . The bank walla will recalculate the new EMI and ask u to hand out the new pdc as per the new EMI.I have not tired this but I dont think there should be any problem regarding this . The only benefit here is that once your EMI gets changed the uncleared cheques of the previous EMI become useless and you have to go thru a formal process of getting back the uncleared cheques + You also end up wasting leaflets of your cheque book if you give out all the pdc's at one go . I hope I am clear ...