When applying for a home loan, timely repayment is the primary requirement that borrowers need to fulfil. However, a shortage of monetary funding can arise at any time due to unforeseen events. In such situations, it often gets difficult to pay EMIs on time.
To avoid these circumstances, it is best to use a housing loan calculator. It helps predict the EMI payable on a home loan beforehand. It also lets borrowers choose the loan amount and tenor best suited for them.
Why do you require a home loan EMI calculator?
Individuals applying for a home loan can resort to a housing loan EMI calculator for better debt management. Here are several benefits of calculating EMI using a calculator.
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Easy calculation:
Individuals can use housing loan calculator online tool to calculate EMI payable by entering the home loan interest rate, loan amount, and tenor. Therefore, you wouldn’t have to use a complicated formula to derive your monthly liability against a home loan.
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Necessary for loan management:
Some applicants may have a surplus to make part-prepayments. Therefore, if the individuals want to know exactly how much part-partpayments will let them save on interest payable, they can use this calculator.
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Choosing the right tenor:
It also helps determine the right tenor required to pay off the loan. The applicant can opt for a shorter or longer loan tenor based on their financial capacity to arrive at a favourable EMI amount.
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Accurate results:
Manual calculations can lead to mistakes that can affect the final result. Therefore, it is best to depend on a home loan EMI calculator. It will help derive accurate results and create a repayment plan accordingly.
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Compare interest rates:
Using a housing loan calculator, individuals can also compare different interest rates that HFCs offer. It allows them to settle for the most competitive rates, ensuring minimal borrowing cost.
Therefore, these reasons justify why an individual should utilise an EMI calculator for home loan.
How to use a home loan EMI calculator?
Follow these steps to compute monthly instalments using Home loan EMI calculator.
- Visit a reputed financial institution’s website.
- Navigate to “home loan EMI calculator.”
- Enter the home loan amount, tenor and rate of interest
- Select “Calculate”
A home loan EMI calculator will show the EMI, interest payable and total amount payable at once.
This calculator uses the formula below to determine the monthly liabilities.
Home loan EMI = {P*R*(1+R)n}/[{(1+R)n}-1]
Here,
P = Principal home loan
R = Interest rate
N = home loan tenor
The result will include –
- EMI payable: The calculator will display the amount of EMI payable until the end of tenor.
- A cost break-up: It will display the total interest payable and the amount payable (principal + interest)
- Amortisation schedule: This schedule provides a detailed breakup of EMI payable for the entire tenor. It also shows the interest and principal components of every EMI.
Therefore, when applying for a home loan, you should use a housing loan calculator available online for free. Almost all leading HFCs allow borrowers to use this tool.
They also offer pre-approved offers that simplify and hasten the home loan application process. These offers are also available on other products like loan against property, home loans, etc. To check your pre-approved offer, input your name and contact number.
These are some of the factors you need to consider while opting for a home loan. However, to streamline the process, you should use a home loan calculator. It will help you choose the best deals available on this secured credit.
