Home loan EMI, amortisation and prepayment- The mathematics every borrower in India must understand

Understanding home loan mechanics helps borrowers reduce total borrowing costs. The reducing balance method ensures interest decreases as the principal falls. Loan amortisation shows how EMIs gradually repay both principal and interest. Early prepayments significantly reduce total interest paid over the loan tenure. Repo rate changes impact floating rate home loans, influencing EMIs or tenure.

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