ICICI Bank provides you with personal loans at an interest rate of 10.50% per annum onwards. And if you aren’t lucky in getting the lowest interest rate on your loan amount, don’t get disappointed! You can still afford the ICICI Personal Loan repayments. All you need to do is balance the interest and EMI payout. Read this page below and know how to manage the ICICI Personal Loan repayments.
Tools That Can Help Reduce ICICI Personal Loan Interest Repayments
ICICI Personal Loan EMI Calculator is one such tool that gives you approximate EMI and interest payout numbers beforehand. Using the results of the calculator, you can adjust your monthly expenses and create enough space for ICICI Personal Loan EMIs
Check out the working of this online calculator on the below example –
Due to the financial crisis induced by COVID, Parmesh couldn’t afford his home renovation. So, he considered getting an ICICI Personal Loan. This way, the cost can be managed in equated monthly installments. But he’s not that lucky to get the lowest ICICI Personal Loan Interest Rate. The interest rate offered to him was 14.00% per annum.
Well, Parmesh used the ICICI Personal Loan EMI Calculator to figure out the repayment estimate by which he could reduce his interest obligations considerably. He entered the loan details inside the online calculator, such as –
- Loan amount – INR 9 Lakh
- Interest rate – 14.00% per annum
Now, he slides through different tenures to see which will offer him the lowest payout in respect of both EMI and interest.
For two years, Parmesh will be paying 24 EMIs of INR 43,212 and the total interest will be INR 1,37,078. Well, this seems more than what Parmesh could afford. For three years tenure, the EMI is INR 30,760 and the total interest is INR 2,07,355. So this isn’t the right option for him. Now, he chooses the tenure of four years, using the data the calculator generates an EMI of 24,594 and INR 2,80,504 total interest. When a five years tenure is neutered in the ICICI Personal Loan EMI Calculator, Parmesh gets results such as INR 20,941 EMI and INR 3,56,486 total interest.
Fortunately, ICICI Bank offers a longer tenure up to six years, so Parmesh enters the six years tenure and sees the EMI is INR 18,545 and the interest is INR 4,35,252. As you can see longer tenure means a high interest payout which Parmesh is trying to avoid.
So among the available choices, Parmesh opted for a tenure of four years in which he got an EMI of INR 24,594.
Is There Any Option to Save Interest Payout During the Loan Tenure?
Yes, you can do that using the ICICI Bank prepayment facility. In this, you can pay the outstanding loan amount in a lump sum and get the lowest personal loan interest rate. If you do the same, you don’t need to pay the interest of your ICICI Personal Loan anymore.
So, start planning your prepayment with the EMI calculator. See the outstanding loan balance at different points and the time by which you can accumulate the required prepayment amount through your investments. You can earn more money by investing in equities, do the same only if you have enough knowledge of the market fluctuations. If you aren’t an expert in market investment, play safe with fixed deposits and secure investments like bonds, etc.
Use the online investment calculator to see the amount you could earn by the time you wish to prepay your loan. After accumulating the required amount, prepay the outstanding balance of your ICICI Personal Loan to get rid of the liability.
But when you decide to prepay, a charge needs to be paid along with the outstanding amount which will be 5%. Factor in that too when planning to accumulate the required amount.
