Stop drowning in interest. Use the Snowball or Avalanche method to crush your debt once and for all.
Avalanche is mathematically superior. By targeting the highest interest rate (18%), you save the most money overall compared to Snowball.
You pay off the debt with the highest interest rate first.
You pay off the debt with the smallest balance first.
EMI (Equated Monthly Installment) is a fixed monthly payment comprising principal and interest. It's calculated using the formula: P × r × (1+r)^n / ((1+r)^n - 1), where P is principal, r is monthly interest rate, and n is tenure in months.
Prepayment is beneficial if your loan interest rate exceeds your investment returns. For home loans below 7-8%, investing surplus funds in equity may yield better long-term returns.
Longer tenure means lower EMI but higher total interest paid. For example, a ₹50L loan at 8% for 20 years costs ₹41.9L in interest, while the same loan for 10 years costs ₹21.8L in interest.
Fixed rates remain constant throughout the loan tenure, providing payment certainty. Floating rates change with market conditions (MCLR/repo rate), potentially saving money when rates fall but increasing costs when rates rise.