Prepay now or later?

[svikas]

Hello,

I'm a new member to traderji.

I took an SBI Housing loan of Rs 25 Lac for 15 years in June 2011. The current interest is 10.70%. Maxgain facility is enabled for me.

Which of options below is cost efficient:

1) Pre-pay Rs 5000/- every month.
2) Put Rs 5000/- every month in wife's Recurring Depost (RD) drawing 9.5% interest for 10 years. After 10 years, maturity amount will be around Rs 10 Lac. Pre-pay this matured amount (ie Rs 10 Lac) after 10 years.

Could you please suggest which option is better?

Thanks,
Vikas

 

[looser89]

prepay 5000 every month to your loan amount because this extra money deduct principal amount

 

[ganeshams]

prepaying is the best option than the later if you the do the math provided interest rate rate may not goes down drstically.

 

[Ritesh2014]

Hello,

I'm a new member to traderji.

I took an SBI Housing loan of Rs 25 Lac for 15 years in June 2011. The current interest is 10.70%. Maxgain facility is enabled for me.

Which of options below is cost efficient:

1) Pre-pay Rs 5000/- every month.
2) Put Rs 5000/- every month in wife's Recurring Depost (RD) drawing 9.5% interest for 10 years. After 10 years, maturity amount will be around Rs 10 Lac. Pre-pay this matured amount (ie Rs 10 Lac) after 10 years.

Could you please suggest which option is better?

Thanks,
Vikas

I would like to say option 2nd is better, as it will help you to pre-pay 10L after 10 years.