So don’t think that if it’s a 25-year loan, then you would have paid back half your loan in 12-13 years. Do spend some time studying the table below: With each passing month’s EMI, the interest paid decreases and the principal repaid increases. During the latter years, the principal component is higher. If you look at the annual loan schedule below, you will realize that the interest component paid is higher during the initial years. Outstanding Loan Principal at the end of month = Rs 49,89,450Īnd this continues for one by one for all the months in the loan tenure.Įvery month, the Interest payment for the month goes down while the principal repayment goes up.Principal payment for month = EMI – Interest Payment = 38,591 – 33,298 = Rs 5292.Outstanding Loan Principal at the beginning of month = Rs 50 lakh – Rs 5258 = Rs 49,94,742.Outstanding Loan Principal at the end of month = Rs 49,94,742.Principal payment for month = EMI – Interest Payment = 38,591 – 33,333 = Rs 5258. ![]() ![]()
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