Don't Fall into This Home Loan Trap: Insights from Mohmed Abubacker Samsudeen

Are you aware that a 20-year home loan can be completed in just 13 years? This sounds too good to be true, but it does, happen! That is something that finance expert Mohmed Abubacker Samsudeen clears up for you today.

The Power of Extra Payments

Some people assume they can't do anything to reduce the time of their home loan. On the other hand, with just two or three extra EMIs (Equated Monthly Installments) per year, you can pay off a lot earlier and still save money to have financial discipline.

Let's Break It Down

This means that if you take a home loan of 25 lakhs with an interest rate of 9% for a tenure of 20 years, then your monthly EMI will come to around 22500. During the 20 years, you will be paying roughly ₹29 lakh on interest itself!

Now, the turning point: Paying an additional three EMIs each year will cost you ₹67,500 a year. This breaks down into an additional ₹5,625 per month. By doing this, your entire interest payment would be reduced to about ₹16 lakhs, which means nearly a savings of ₹13 lakhs in interest!

The Result

Lastly, you will save a great deal of interest and you will have paid off your 20-year home loan within just 12 years and 3 months. This means you'll own your home free and clear much sooner than you ever thought.

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When considering a home loan, think about making an extra payment. You can end up saving a lot of money and time in the long run. Stop wasting that money and get faster on the road to being debt-free!