Buying a house tops the bucket list for many of us. However, due to the high price of real estate, it often becomes challenging to pay the entire amount out of pocket. This is where a home loan comes to the rescue. However, when purchasing a house, it is important to opt for an affordable home loan that is appropriate. A home loan EMI calculator is a great way to easily plan a housing loan that fits the budget and helps reduce the monthly installment burden when repaying the loan amount.
The housing loan amount requested is the first thing that the lender evaluates because their primary concern is the complete repayment of the loan. Considering that, the lender assesses your repayment capacity, financial stability, and the probability of sticking to the repayment plan, if the requested loan amount seems larger than what you can afford, the lender may reject the home loan application. To avoid such an occurrence, you can calculate home loan EMI anticipating your budget and affordability, and devise a repayment plan accordingly beforehand.
What are the Features of a Home Loan EMI Calculator?
A housing loan EMI calculator is a custom-made tool available online, free of cost, which can be used to calculate home loan EMI or the amount to be paid every month to repay the full loan amount by the end of the repayment tenor. Such a calculator is known for its ease of accessibility and fast and accurate results. Read on to know about the top features of a housing loan EMI calculator.
The most striking feature of a home loan EMI calculator is its accuracy, which helps borrowers evaluate their EMI obligations correctly. Unlike manual calculations, the results are data-driven and computerized, which means there is no room for errors and miscalculations. All you have to do is provide details about the desired principal amount, preferred loan repayment tenor, and the current home loan interest rate – the online tool will calculate home loan EMI and assess the monthly installment instantly.
Handy Loan Repayment Guide
The online calculator can be and should be used to calculate EMIs before applying for a housing loan to come up with a suitable repayment plan. You can review your existing finances and decide on an amount as per the budget if you know the potential home loan EMI amount. Most housing loan EMI calculators offer an amortization schedule to help predict a tentative repayment chart, giving you a deeper insight into the housing loan obligations.
Ease of Accessibility
A housing loan EMI calculator can be easily accessed online. Almost all lenders offer such tools on their websites at zero additional charges. And the best part is that you can use a number of different combinations as many times as you want to calculate home loan EMI. There are no restrictions on the usage of the tool. So, as a potential borrower, you have all the liberty to use the calculator multiple times till you get the desired result.
In a financial market offering a host of options, it is important to compare and analyze various EMI plans before jumping at the first being offered. Therefore, the tool can also be used to weigh up different lenders by calculating the payable EMI based on the current home loan offerings, rate of interest, and lending terms for each one of them.
Thus, a home loan EMI calculator can help you make the best choice keeping in mind your financial requirements, budget, affordability, and financial obligations.
How to Calculate Home Loan EMI?
A home loan EMI calculator is designed in a way that it is self-explanatory and easily comprehendible to users. Although the finer details of the tool may vary from one lender to another, the common details typically required to calculate the home loan EMI remain the same.
The basic formula used to calculate the desired EMI is as follows:
EMI = [P x R x (1+R) ^n] / [(1+R) ^ n-1], where
‘P’ stands for Principal loan amount
‘R’ denotes the Rate of interest, and
‘N’ implies the Number of monthly installments
While manual calculations are prone to human errors, particularly with larger numbers and complex variables, the above formula is seemingly simple. Therefore, to avoid any hassles, you can simply follow these steps to calculate your monthly installments using a housing loan EMI calculator:
- Choose a lender and visit their website
- Access the online ‘Home Loan EMI Calculator’
- Enter the details in the respective fields –
- Housing loan amount
- Chosen home loan interest rate
- Desired repayment tenor
- Hit the ‘Check EMI’ or ‘Calculate EMI’ option to get the results instantly
On the basis of the above inputs, the online calculator will predict the following:
- The expected home loan EMI amount
- The principal component of loan repayment amount
- The interest component of loan repayment amount
- The probable loan repayment schedule
Being well-versed with a home loan EMI calculator can easily help you plan and apply for a housing loan and make the most of it. Some of the top lending institutions, like Bajaj Housing Finance Limited, offer the best affordable home loan deals with simple lending terms at the most competitive rates based on eligibility.