Best Time for Part Payment of Home Loan

Part-payment of a home loan is a way to reduce the burden of the loan component. If we observe and understand the loan repayment schedule, the best time for part payment is one which will reduce outflow from the customer pocket. The best time for part payment of the loan can, therefore, be as early as after your 1^st EMI.  Let’s consider a small illustration which will explain the part payment of Rs 1 lakh after 12, 24 & 36 EMIs:

Illustration

As per the above illustration, if Rs 1 lakh part payment is made after 12 EMIs, an outflow of 5.09 lakhs will be reduced and 4 lakhs outflow from the customer pocket will be saved. You can always make use of the Bajaj Finserv home loan EMI calculator from Bajaj Markets to help you with these calculations.

It is always advisable to part pay as early as possible, especially when the principal component is high in EMI. As the tenor of the loan increases, the principal component decreases in the EMI, so the savings benefit will also drop considerably.