ICICI Home Loan foreclosure calculation?

rags1710 · Post by **rags1710** » Wed Oct 05, 2011 4:36 pm

Hi All,

I've a home loan of 25 lacs with icici and a floating rate and the EMI keeps on increasing currently at 294xx :(..so I've decided to do pre payments and foreclose.
One of my question is already answered. But I've a bigger concern/ question: as per my current amortization schedule icici has cut only interest rate and most of the principal amount remains( around 24.x lacs) . So when I pre pay do I need to pay the whole principal amount ? coz I've already paid around 12.6 lacs in EMI already..?
Will ICICI do a recalculation? coz, paying 12.6 lacs+ 25 lacs is ridiculous just for 4yrs? pls let me know who have gone through a similar process/ situation?

Regards.

samv · Post by **samv** » Wed Oct 05, 2011 11:10 pm

I am confused. Do you want to prepay or foreclose?

Prepay = Pay off the mortgage early.
Foreclose = Do not pay the mortgage. Bank auctions off the house and may come after you if there is under-recovery

r2i-mumbai · Post by **r2i-mumbai** » Thu Oct 06, 2011 2:18 am

If you are prepaying then you will have to pay current outstanding principal balance + any prepayment penalty as specified in the contract. The amount you paid so far is interest cost for borrowing 25 lacs for 4 years plus some principal repayment. Roughtly you paid 3 lacs interest per year on a 25 lac loan for a interest rate of approx 12%. That's on the higher side. On a long term loan its not unusual to see that major portion of your EMI goes towards interest. You can use any EMI calculator to check if your interest and principal component of EMI is correct or not.

rags1710 · Post by **rags1710** » Thu Oct 06, 2011 6:48 pm

r2i-mumbai;414451If you are prepaying then you will have to pay current outstanding principal balance + any prepayment penalty as specified in the contract. The amount you paid so far is interest cost for borrowing 25 lacs for 4 years plus some principal repayment. Roughtly you paid 3 lacs interest per year on a 25 lac loan for a interest rate of approx 12%. That's on the higher side. On a long term loan its not unusual to see that major portion of your EMI goes towards interest. You can use any EMI calculator to check if your interest and principal component of EMI is correct or not.

Thanks..sorry I meant to prepay. I had taken a loan of 25 lacs for 20yrs..and so far its been 3.5yrs and I've already paid over 12lacs just as interest..what I mean to ask is..if I prepay my loan in next 1yr..wouldn't there be a recalculation of the amount I need to pay? or I've to pay whatever is shown as outstanding principal amount in my amortization schedule ? It's little disappointing if I've to pay all the outstanding principal amount considering I've over 13% as interest rate!! :(

r2ihyd2010 · Post by **r2ihyd2010** » Thu Oct 06, 2011 6:54 pm

You will have to pay all of the remaining principal amount to close the loan r2i-mumbai said. Most of the amount you have paid until now had gone towards the interest.

You can use the below amortization calc to see how much had gone towards principal and interest.
http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx?ec_id=m1082525

rags1710 · Post by **rags1710** » Fri Oct 07, 2011 8:54 pm

thanks guys!