CA Kapil Kumar

We have already seen the scenario of interest rates rising.

But if the repo rate falls, you need to apply to the bank.

If you have not seen the last video of this series you should definitely watch it.

Applying will reduce the interest rate on your home loan.

But if you are someone who does not want to worry about interest rates going up or down, you should go for a fixed interest rate loan.

In this case, the interest rate that is fixed on the first day will remain fixed for the entire period, regardless of how much the repo rate or floating rate goes up or down.

However, there are some drawbacks to this as well. First, it is 1-1.5% higher than a floating rate loan.

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Disclaimer: CA Kapil Kumar’s goal is to improve financial understanding in India. Our material is designed purely for educational and entertainment reasons. We don't offer investment or financial advice. Any mistakes, exclusions, or descriptions on our pages are not our responsibility. Prior to making financial choices, please independently verify the accuracy of all information

By doing this, you can save lakhs of rupees on your home loan. Let's see how.

After 5 years, or 60 months, a 30 lakh loan will have a balance of 26 lakhs. If you pay off this 26 lakhs with a monthly EMI of 29,000, you will pay 27 lakhs in interest. However, if you keep the same monthly EMI of 25,000, you will pay 58 lakhs in interest.

In other words, the cost of saving 5,000 rupees today is 30 lakhs in interest.

Therefore, it is important to remember that if your loan interest rate changes and you can afford to pay more EMI, you should go to the bank and increase your EMI amount, not extend your loan period at the same EMI.

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Disclaimer: CA Kapil Kumar’s goal is to improve financial understanding in India. Our material is designed purely for educational and entertainment reasons. We don't offer investment or financial advice. Any mistakes, exclusions, or descriptions on our pages are not our responsibility. Prior to making financial choices, please independently verify the accuracy of all information