Housing loans are probably the most sought after financing option if one is planning to purchase a property. However, it is a significant financial commitment, and individuals need to prepare their finances to accommodate this typically long-term debt.
The loan liability depends mainly on the EMI pay-outs. Hence, borrowers need to compute the EMI amount beforehand that they are supposed to pay. The amount of your Home Loan EMI Payments will depend on the loan amount, interest rate, and loan tenure. Therefore, using a home loan EMI calculator will prove beneficial as it will provide borrowers with a realistic repayment plan, allowing them to foresee their future financial status and plan accordingly.
Home loan EMI calculator: uses & benefits
A home loan EMI calculator is an effective online tool that simplifies the lending process in the following ways:
1. Accurate and Simple Calculation
Manual calculations are tedious and susceptible to errors that borrowers cannot afford to commit while availing of a home loan. With a home loan EMI calculator, borrowers can get rid of mistakes and get accurate results.
2. Instant results
Borrowers can save up turnaround time by getting an instant result from an online home loan calculator. They need to feed in the three variables: principal amount, interest rate, loan tenor and get EMI amount. You can use a Personal Loan EMI Calculator to compare different loan offers and choose the one that best suits your needs. The instant result provides borrowers with a heads-up on how to plan their finances and make the borrowing effective by all means.
3. Choose the right repayment tenor
Knowing the monthly instalment assists borrowers in choosing the appropriate loan tenor. If borrowers can afford higher monthly instalments, they can go for a short repayment tenor. On the other hand, borrowers can choose a longer loan tenor and pay off the EMI amount at their convenience. As the borrowers can calculate the EMI payments, they can gauge fixed expenses and analyse the most important financial commitments.
4. Compare loan offers
The first and foremost thing that every borrower must do before availing of a loan is to compare various offers extended by different financial institutions. To do so, these online calculators can come in handy, as individuals can easily evaluate the total cost of borrowing, EMI amount, thereby choosing the best deal that caters to their financial requirements.
5. Helps in Financial Planning
Meeting the home loan eligibility criteria, evaluating EMI amount and loan tenor using these online tools ensure quick approval for the loan amount and timely repayment of the outstanding amount. Therefore, helping one plan their finances and protect borrowers from future financial trouble. Furthermore, knowing monthly instalments assists borrowers to plan their budget efficiently and fetch an amount that fits their repayment capability.
6. Loan Amount to Borrow
As borrowers get an accurate representation of the monthly instalments, they get a compact idea of the amount of loan they should borrow, which will not strain their financial health while making a repayment. Borrowers must vary the loan principles until they are sure of the amount they can repay efficiently.
7. Plan Prepayments
There are scenarios where borrowers are left with extra funds even after paying out their monthly instalments. In such cases, they can use the fund to make prepayments. To access financials and see how prepayment helps repay loan amounts before the due date, borrowers can use a home loan EMI calculator to conduct such assessments.
Furthermore, individuals need not submit any personal details to use the home loan EMI calculator, thus securing a borrower’s confidentiality. Also, it provides the entire break-up of financial charges like total payable interest rate, processing charges and likes associated with the borrowing.
The availability of high-value loan amounts, flexible loan tenor, and an online home loan EMI calculator makes the borrowing worthwhile. Moreover, the current home loan interest rate is at an all-time low, making a home loan a viable option.
Know how to use a home loan EMI calculator
The mathematical formula based on which home loan EMI calculator works is –
EMI amount = P x R x (1+R)^N / [(1+R)^N-1], where –
- P represents principal amount
- R stands for interest rate
- N suggests number of months or loan tenor
Here are the steps that will guide borrowers to fetch the EMI amount from the calculator:
Step 1: Visit the official website of the preferred lender and head to the home loan EMI calculator page.
Step 2: In the slider, enter loan tenor, loan principal and interest rate
Step 3: Now submit the numbers.
After feeding in these details, a home loan calculator will show the EMI amount, total interest payable and total amount. By altering the digits, borrowers can watch varied EMI amounts, hence helping them choose an affordable loan amount. If you are struggling to make your EMI payments, you may want to consider opening a High-Interest Fixed Deposit to generate additional income. Moreover, borrowers can use this formula to compute the EMI amount manually. With such a convenient online tool, availing of a home loan in India has become more permissive.
Apart from using the easily accessible home loan EMI calculator, borrowers can enjoy the specially-tailored pre-approved offers extended by several leading financial institutions. These offers are available on financial products like home loans, loans against property, etc., and helps expedite the loan application process and save time. Intending individuals can check their pre-approved offers by submitting their names and contact details.To sum up, a home loan is a high-value financial commitment and calls for proper diligence and planning from a borrower’s end. Hence, borrowers should consider a home loan EMI calculator to balance well between the loan amount to borrow and its repayment.