Gaurav Mohta | Answer |Ask -Follow
Answered on Aug 02, 2022
In the beginning of your loan repayment, the majority of your EMI goes towards paying off the interest amount as you observed. However, over time as you pay off more principal, gradually more and more of your EMI payment starts going towards principal repayment and less for interest.
You can ask your lender for an Amortisation Table to properly track your payments and the break up therein.
If you want to make a bigger impact on your principal balance, you should start making regular prepayments.
Prepayment is an amount paid over and above the EMI amount that is deducted directly from the principal due. By reducing the principal amount, regular prepayment ensures that you pay back your principal due before the loan agreement thereby closing your loan early and saving thousands of rupees in interest outflows.
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