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Stop paying more for SBI & ICICI Home Loan EMIs

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EMIs (Equated Monthly Instalments) are preferred by customers to ease out their burden of paying the full amount of the purchased expensive items at once. EMIs are meant to plan your finances in a better way so that you can balance your monthly expenses without too much burden on your pocket.  Moreover, EMIs could be generated for any product or service which is comparatively costlier.

However, any kind of sudden increase in EMIs due to change in interest rates may cause a hassle to other otherwise simplified financial life. This makes a lot of difference specially in the case of home loan because here generally EMIs are higher and even the slightest change in interest rate can make a lot of difference.

Recently, SBI and ICICI Banks increased their home loan interest rates. Previously, consumers were supposed to pay SBI home loan interest rate of 8.45% which has now increased to 8.65% onwards. Likewise, ICICI has also hiked their home loan interest rates from 8.70% to 8.85% onwards. Therefore, considering this hike, your EMIs will surely increase. So, it is better to manage your EMIs before even planning for a home loan. For that you can visit loansof365.com and check your EMIs from its Home Loan EMI Calculator.

Below is the tabular form of the interest rates and charges:

SBI Home Loan Interest Rate

Interest Rate 8.65% onwards
Processing Charges Up to 1% p.a.
Loan Amount Rs. 10 crores
Cheque Bounce Charges Rs. 500 per instance
Cheque / Instrument Swap Charges Rs. 500 per instance
Prepayment or Foreclosure Charges Nil

ICICI Home Loan Interest Rate

Interest Rate 8.85% onwards
Processing Charges 0.50-1% of the loan amount + applicable taxes
Loan Tenure Up to 30 years
Loan Amount Rs. 10 crores
Cheque Bounce Charges Rs. 500 per instance
Prepayment or Foreclosure Charges Nil (Floating), Upto 2% + taxes (Fixed)

Note: The facts and figures provided above are illustrative and subject to periodic change.

Generally, an EMI Calculator is used to calculate EMIs those you need to pay as a form of loan repayment. Home loan can be repaid for upto maximum 30 years. As per your personal requirements and eligibility criteria, you can add details like loan amount, tenure and interest rate to calculate your home loan EMI.

Simple ways to avoid paying extra on SBI & ICICI Home Loan EMIs

  • Choosing deal with Lowest Interest Rates: Most trusted of all the options is to get home loan at lowest available interest rates. Lower interest rates mean lesser EMI cost and easier repayment cycle.
  • Regular Repayment of EMIs:Repayment history should be strong, as it directly represents your creditworthiness and your capability to repay a loan. Even if there is one missed instalment, it disturbs your balance loan amount and EMIs.
  • Prepayment in form of Lump Sum Amount: Lump sum amount that you receive by any source or by anyone can be used to pre-pay your home loan. It saves you a lot of money and can rapidly reduce your loan tenure.
  • Loan Refinancing:Moving to any new lender is a wise option if you get lower interest rate as compared to the existing and total servicing cost gets reduced. Banks and NBFCs tend to lower their interest rates from time to time. One has to keep a thorough check on the current interest rates to avail and enjoy the feature of loan refinancing.
  • Paying an Extra EMI each year:An extra EMI in a year could be tough to manage but this practice is very beneficial in the long run, as home loan is an association with banks of years and years. This practice can reduce your overall outstanding amount.

Let’s understand about EMI Calculator and its functionality

EMI Calculator contains repayment of the principal amount and payment of the interest on the outstanding amount of your home loan. Longer the loan tenure is, lower the EMI becomes.

EMI Calculation Formula: EMI = [P x R x (1+R)^N]/[(1+R)^ (N-1)]

Abbreviation and alphabets in the formula stands:

  • EMI:Equated Monthly installment
  • P:Principal or the total loan amount
  • R:Rate of interest (On monthly basis)
  • N:Tenure of repayment (Tenure should be on monthly basis)

Let us consider an example to understand EMI calculations:

For instance, you have taken a home loan of Rs. 30 lakhs for 20 years at an interest of 8.5 % p.a. Firstly; we need to convert the annual interest rate into a monthly rate and the tenure into months. To calculate the monthly interest rate, we divide the annual interest rate by the number of months in a year. The 20-year loan tenure must also be converted into months before integrating into the formula i.e. 240 months, or else to make it even more simpler you just need to fill in your requirements by adjusting the slider and can get exact amount of EMI, as shown in the below image from loansof365.com.

Adding more burdens on existing burden is not a wise thing to do. Same is the case of home loan and related EMIs. People who take home loan are already under a pressure of repaying home loan on time with added interest rates. Any consumer will not like to give away money on at least EMIs. Therefore, by these recommendations you shall be benefitted and will have better insight in comparing, choosing and selecting home loan to meet your requirements. By mentioned ways you can plan your home loan efficiently without paying extra on your EMIs unnecessarily.

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