Purchasing a dream house can at times be a tedious job that involves a very large financial transaction. Opting for a home loan, however, assists in purchasing a house with only a small down payment. Still, it is important to ensure that home loan EMIs are not exceeding one’s desired budget.
The house EMI calculator helps individuals know the right home loan EMI amount in advance and select the loan amount and tenor accordingly. This helps to plan finances accordingly, without affecting one’s monthly expenses.
Keep on reading this blog to learn how to use a home loan EMI calculator and more.
What is a home loan EMI calculator?
A house EMI calculator is an easily accessible online tool for borrowers to figure out the EMI amount they have to pay for a certain loan. This online tool is quite easy to use and readily available online. When applying for a home loan, the EMI amount depends on several factors including tenor, loan amount, and home loan interest rate.
Borrowers need to pay the EMI every month without failing once. Once the values of the home loan principal amount, rate of interest, and tenor are entered, the EMI amount will be displayed instantly. With proper use of a home loan calculator, one can know the home loan amount they can avail. This will help to pay home loan EMIs without affecting their monthly budget.
How to use a home loan EMI calculator?
The use of a home loan EMI calculator is easy. Here is how one can use a home loan EMI calculator:
Step 1: Select or add the loan amount.
Step 2: Type in the tenor of loan repayment.
Step 3: Enter the rate of interest or use the slider to adjust.
Following these steps, one can find out the tentative EMI amount of a home loan.
How to calculate EMI for a home loan?
Calculating home loan EMI is a simple method. One needs to enter three variables of a home loan, namely the rate of interest, amount of loan, and tenor. Make sure the rate of interest is provided for each month.
Borrowers can find out the EMI amount for a home loan using the following EMI calculation formula:
EMI = [P*R*(1+R)^N]/ [(1+R)^N-1]
Where P stands for the principal amount or loan amount
N is the number of EMIs to pay
R denotes the home loan interest rate every month
Using this formula, it might be time-consuming to calculate the monthly EMIs of home loans. The generated amount will however provide a detailed overview of one’s repayment strategy. However, even a small mistake in entering these values could give completely wrong results.
In this situation, the use of an EMI calculator is advisable. This will allow a person to enter multiple values and know the EMI applicable for each loan value and tenor.
What are the benefits of using a home loan EMI calculator?
One can avail various benefits with the proper use of a home loan EMI calculator. They are listed below:
Choose the right tenor
Choosing the right tenor of a home loan, one can come to know about the EMI amount using a home loan calculator. By paying off high EMIs, one can choose a short loan period and vice versa.
Easy process
The entire process of calculating EMI is easy. Enter the home loan interest rate, processing fee (if applicable), tenor, and the loan amount.
Proper loan management
With a home loan EMI calculator, it becomes easy to manage home loans efficiently. This scenario arises when one has extra funds after the scheduled EMI payment. It then becomes possible to make prepayments and reduce the tenor or EMI value.
Nowadays, lenders provide pre-approved loan offers to existing customers. Borrowers must check out these offers from the official website providing their names and other necessary details.
To conclude, one can select the right loan amount and tenor after calculating EMI options. This will enable them to increase or decrease the loan amount/tenor as required. House EMI calculators nowadays come with an easy interface. One can operate it on a mobile phone as well as a laptop.