It is the dream of everyone to move into their own home. Yet, not everyone has the affordability to buy or construct their own home using their funds.
It is where the option of housing loans is made available by known banks and non-banking finance companies (NBFCs).
For applying for a home loan, one needs to pay an exact EMI amount comprising of the principal and interest figure.
Not all have an idea of an amount paid as part of the home loan EMI.
Hence, they avoid applying for a home loan.
When they are unaware of the precise EMI amount; they are not in a condition to indulge in proper financial planning.
But nowadays, it is possible to plan out home loan repayments properly. It can be done using the home loan EMI calculator.
Let’s check how the home loan EMI calculator tool can help a prospective home loan borrower to do appropriate financial planning! Read on!
What is a home loan EMI calculator?
The housing loan EMI calculator is an online tool available on the website of a leading bank or NBFC that you wish to apply for the loan with.
The tool works round the clock and is available for free.
Using the housing loan EMI calculator, it is possible to calculate an exact home loan EMI figure and plan out housing loan repayments in advance.
How to use the home loan EMI calculator and calculate home loan EMIs?
Using the housing loan EMI calculator is dead easy if you can follow a few basic steps. Let’s have a look:
- Land on the website of the creditor you want to apply for the housing loan with. Navigate to the home loan calculators section on the home loan page, and open the housing loan EMI calculator.
- After you open the housing loan EMI calculator, you will have to enter the loan amount, repayment tenure, and applicable interest rate.
- Once done, the home loan EMI calculator will showcase an exact home loan EMI amount. It will also showcase the entire home loan interest rate charges payable and total payment (principal + interest).
These steps to compute housing loan EMI using the calculator are standard. They may vary from lender to lender. Thus, the exact steps to calculate EMIs should be checked on a lender’s website to apply for the loan.
What elements affect your housing loan EMIs?
The principal amount is the sum of money (home loan figure) that a borrower avails from a lender. The amount is known as being directly proportional to EMIs. If there is a reduced principle, it will bring down your monthly EMIs and vice versa.
- Home loan interest rate
A home loan interest rate is the rate at which a lender provides you with the debt. Even this is proportional to home loan EMIs value.
- The repayment tenure
The loan duration is known as the tenor within which you are needed to repay the housing loan. The tenure is known as being inversely proportional to the EMIs of the loan. If there is longer tenure, it makes the monthly EMIs affordable and vice-versa.
What are the advantages of knowing housing loan EMIs in advance?
Good financial planning always pays off and leads to stable outlays’ maintenance.
Computing home loan EMIs lets a prospective borrower know an amount to keep aside as EMI per month.
Thus, it paves the way for planning well and deciding if one has enough money to repay the debt or not.
Home loans are long-term obligations, and you have to be in a good financial condition to ensure timely repayments for years.
Calculating the EMI using the housing loan EMI calculator also lets a prospective borrower know real-time results. They are also without errors unlike in the case of manual calculation.
You are now aware of the steps to compute home loan EMIs using the home loan EMI calculator.
With the home loan EMI calculator in action, it becomes possible to be aware of the exact amount payable and plan an easier repayment.
To begin with, you can land on the platform of the lender you wish to apply for the loan with and start using the home loan EMI calculator right away.