Generally a home loan tenure is for 25 to 30 years in which you will have to keep making regular repayments and also the interests accordingly. Since this is a very long tenure, there are certain options which can reduce the time span. One of them is the lump sum repayment.
How Does The Extra and Lump Sum Calculator Work?
You can choose to repay a lump sum amount in between the loan tenure. The impact of this repayment is calculated by the lump sum repayment calculator. It will determine the effect on the mortgage length and also on the interest amount paid in total.
You can select the loan repayment frequency in the calculator. While doing so always remember that the more the mortgage repayments the less the paid interest. Then you can choose the time at which you want to make the lump sum payment. If you plan on repaying the lump sum amount at an earlier stage then you would be saving a lot of money. An estimation of the overall saved interest amount would be given out by the lump sum and extra repayment calculator along with the time to repay the loan.
What is more effective: A larger lump sum or more extra payments?
Based on your financial status, you can decide which kind of mid level repayment would be beneficial for you like - Larger Lump Sum or More Extra Repayments. But understand that not to keep saving the extra money to make it a bigger lump sum to repay the loan at a later stage.
The reason behind this is, it would take a lot of time to save that much amount of money and with that it would also be of no use if you repay it late. As most of the amount would already be paid off through regular installments.
It will be more effective to repay the amount after calculating the interest amount and also the mortgage duration on the mortgage lump sum repayment calculator. As soon as you get extra money in hand, use it for repayment.