Accuracy in terms of the loan amount is one of the biggest concerns when planning for a home loan. This is because it’s very important to know how much exactly you need. And when you are done with deciding the loan amount, it is equally important to calculate the amount which you need to pay as interest. Doing all this with accuracy is a bit difficult, but you don’t need to worry as- a Home Loan EMI Calculator is the one which can help you to calculate all this.
What is a Home Loan EMI calculator?
As its name suggests, a home loan EMI calculator helps you to calculate how much your home loan will cost along with the payable interest. The calculator even let you know your estimated EMI towards your home loan. Home loans are long tenure loans, and often stretching to decades, and using a Home Loan EMI Calculator helps you to know your financial outflow towards your home loan. This again helps you to plan your budget and decide your affordability.
Using a home loan EMI calculator can also help you compare different home loan plans offered by different lenders. The calculator even helps you to adjust your tenure period as per your affordability.
So, when you are not satisfied with your loan offering, you can change the loan amount, interest rate, tenure, and even your home loan provider and choose the one which is best suited for you.
EMI Calculation Formula:
Here, E is your EMI, P stands for the principal amount, R for the rate of interest every month. N denotes the tenure of your home loan.
One important fact for your home loan repayment is- The monthly payment amount remains fixed but over time you need to pay less towards interest and more towards the principal repayment.
So it’s clear that factors affecting your home loan EMI are:
- Interest Rate
- Processing Fee
Benefits of Using a Home Loan EMI Calculator
Easy To Use: The home loan EMI calculator is easy to use- you only need to enter the loan amount, interest rate, and tenure period, and you will get the result that is your estimated EMI, total payable interest and total cost of borrowing. No complicated calculations and you get the accurate result.
Can Compare Different loan offers: The home loan calculator can help you compare different loan offers from various banks. Doing this is easy as you can enter the loan details & offering of each bank and can know the best-suited one for you.
Get the breakups: The home loan calculator not only provides you the calculation for your home loan but also provides you the breakups of the costs involved. So, when availing the home loan if you encounter any hidden charges, you can ask your lender directly about it as you know the breakups of the entire cost involved.
Helps you plan pre-payments: When paying your home loan EMIs, you can use the home loan EMI calculator and plan for a pre-payment or a part payment, This can be done whenever you have sufficient funds. Using an EMI calculator, in this case, will help you know the difference in your EMI before & after the prepayment and hence you can easily decide whether to go for prepayment or not? And how effective it will be.
Choosing the appropriate tenure: As we know that EMI for any loan directly depends on the interest rate and tenure period. And using a home loan EMI calculator helps you to know the estimated EMI, so you can adjust your tenure as per your affordable EMI.
Help you plan finances: Using an EMI calculator gives you an idea about the monthly payable EMIs towards your home loan. Hence, this can help with planning your budget keeping your EMI amount in mind. This way you can also manage your other financial obligations such as other loans and investments.
Remember planning the repayments against your borrowings is an important thing, and the EMI calculator helps you to perform this accurately and effectively. So, before you apply for a big-ticket loan don’t forget to use an EMI calculator.