🔵 Loan Option 1
Monthly EMI—
Total Interest—
Total Cost (incl. fee)—
🟢 Loan Option 2
Monthly EMI—
Total Interest—
Total Cost (incl. fee)—
🟡 Loan Option 3
Monthly EMI—
Total Interest—
Total Cost (incl. fee)—
How to Compare Loan Offers
When comparing loans, don't just look at the interest rate. Consider:
- Effective rate vs. advertised rate — processing fees increase the effective cost
- EMI vs. total cost — a lower EMI (longer tenure) often means paying significantly more in total
- Prepayment charges — some lenders charge for early repayment, eliminating a key saving strategy
- Floating vs. fixed rate — floating rates may be lower today but can rise
Frequently Asked Questions
Should I choose the lowest EMI or the lowest total cost?
The lowest total cost (principal + all interest + fees) is objectively cheaper. The lowest EMI just means you are spreading the same cost over more years. If cash flow allows, choose a shorter tenure at a manageable EMI.
How much does a 0.5% rate difference actually matter?
On a ₹50 lakh, 20-year home loan, a 0.5% rate difference amounts to ₹3–4 lakh in total interest. Always negotiate for the best rate.