Paying ₹1.11 lakh extra to stretch to 5 years
On ₹70,000 a month, the 3-year EMI of ₹26,571 takes about 38% of her pay. The 5-year EMI of ₹17,796 takes about 25%. The catch is the interest. To save ₹8,775 a month, the 5-year loan costs ₹1,11,161 more than the 3-year one.
The 4-year loan sits in between. Its EMI is ₹21,067, about 30% of her pay, and it saves ₹56,514 in interest compared with 5 years. Renovation bills also tend to run over the quote, so it helps to keep some savings aside for that rather than borrowing again later.
Frequently asked questions
What is the EMI on ₹8 lakh for 3 years?
At 12%, it is ₹26,571 a month. You pay ₹1,56,572 as interest and ₹9,56,572 in total, so interest adds 19.57% to the loan.
Is a 7-year loan a good idea for ₹8 lakh?
The EMI drops to ₹14,122, only ₹3,674 below the 5-year EMI. Interest jumps to ₹3,86,264, which is ₹1,18,531 more than 5 years and nearly half the loan. Take 7 years only if no shorter EMI fits.
How much is the 2-year EMI on ₹8 lakh?
At 12%, the 2-year EMI is ₹37,659 and interest is ₹1,03,811. It is the cheapest option here, but it suits a household with a much higher income or two earners.
Does a 1% lower rate change much on ₹8 lakh?
At 11% instead of 12%, the 5-year EMI is ₹17,394, ₹402 less a month. Interest falls from ₹2,67,733 to ₹2,43,636, a saving of ₹24,097. A good credit score and a quote from a second lender can be worth that much.
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