Choice between shortening the year of housing loan or reducing the monthly amortization in bank loan?

Posted by Fitz Villafuerte under Loans, Debts & Credit Cards on September 11, 2013

We have a 15yr housing loan, 30k/monthly amortization. we’re planning to pay extra 100k on its anniversary date. we’re asked to choose between shortening the year term or reducing the monthly amortization. what’s the best choice? thanks in advance! 🙂




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One Response to “Choice between shortening the year of housing loan or reducing the monthly amortization in bank loan?”

  1. Lola says:

    Actually, it goes down to the basics:

    1) Compare the total payments you will make over the amortization period for both housing loan and bank loan. You might have to consult the respective offices to get the information – rebates, pre-termination discounts if you fasttrack payments, etc. Talk out your problem with them, they might give you helpful tips as well.

    2) With the existing housing loan, you have at far been comfy with your budget, but if u change the expense to the amount of the bank loan, what adjustments if any will you be making now – specifically financial adjustments?

    3) Which option is more advantageous in terms of convenience, affordability, financial expense, “not so heavy on the budget” without sacrificing your family’s need now and in the long-term with the loan still to be paid.

    4) Discuss with your partner. Two heads are better than one. 🙂

    Hope I have been of help. Good luck and God Bless!

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