Understanding Your EMI
Your Equated Monthly Installment (EMI) consists of the Principal (loan amount) and the Interest (cost of borrowing). In the early years, you pay more interest; later, you pay off more principal.
Pro Tip: Making just one extra EMI payment every year can reduce your loan tenure by up to 3 years!
Home vs. Car Loans
- Home Loans: Long tenure (15-30 yrs), lower rates. Tax benefits available under Sec 80C.
- Car Loans: Short tenure (3-7 yrs), higher rates. Choose the shortest tenure you can afford to save on interest.