Is it better to reduce EMI or reduce the tenure of a home loan in India with bulk principal payment on an existing loan?
Your decision should be based on how much you are willing and able to pay each month. When you reduce your EMI, your home loan tenure increases. The advantage of this is lower EMI payments and more cash in hand throughout the tenure of the home loan.
However, your interest outflow is more when compared to a shorter loan tenure. You can shorten your loan tenure with a prepayment in parts as and when you have surplus funds. These prepayments go towards the repayment of the principal components of the home loan and helps you to repay your home loan faster.
