EMI Prepayment

EMI Prepayment

In a 5 year loan the interest amount is only 25% and in a 25 years loan the interest amount is nearly 50%.
 
Long term loans seem comfortable but cost us the moon.
 
If you think you can re-pay your housing loan faster, take a loan for a shorter period from the beginning but do not pre-pay your 20 year loan in 5 years because in 5 years the bank would have taken away 40% of the interest on the total loan and would make a killing with your pre-payment.
 
People take long term loans and then wish to pre-pay. It appears to be a comfortable strategy but this comfort comes at a very dear cost.
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