Personally, I think that buying a house is a huge deal. However, the bigger deal is the EMI to be paid for it. To put in simple words, EMI is the amount paid every month by the borrower to pay back the borrowed amount. There is a pre-determined rate set at which the interest must be paid. The Home loan EMI is a long-term financial liability. Therefore, it is essential that you calculate it carefully before you decide to avail a loan to buy your dream house. Wondering how to calculate? Well, Home Loan EMI Calculator is available online.
Home Loan EMI Calculator: What is it?
Home loan EMI calculator is a comprehensive tool that helps in finding the ideal scheme for you. In fact, the tool can help you in predicting which EMI scheme can be beneficial for you. Besides, it helps to plan and arrange finances ahead of time. One can estimate how much he needs to shell out every month over the period of entire home-loan tenure. Well, this EMI depends on multiple factors. Let’s discuss a few.
Home Loan EMI: Factors That Affect
Interest Rate
The interest rate or the rate of interest (ROI) is the percentage at which the Banks/ NBFCs offer the loan to a borrower. Besides, it is directly proportional to the value of your loan EMIs.
Loan Tenure
The basic rule of EMIs state that the longer the tenure, the lower will be your EMI and vice versa. However, one thing that people often overlook here is that the longer tenure will come with higher interest payment, which will eventually lead to increase in your overall credit cost.
Principal
It is actually the loan amount that you avail from the lender. Besides, it is directly proportional to your EMIs. To put in simple words, lower principal will lower your monthly instalments and vice versa.
So basically the tool helps you to compute your monthly instalment based on the loan amount, the tenure for which you are availing and the interest rate that is levied on the amount borrowed. So, if you are still wondering how an online tool can help; let’s elucidate.
Online Housing Loan EMI Calculator: Benefits
A Housing loan EMI calculator helps you to make a decision on if you can afford the financial commitment. This calculator is an online tool for computing the EMI of a home loan. Undoubtedly, repayment of the instalments needs excessive financial planning. The EMI calculators available online are free of any charge. Besides they give reliable results too. Here are a few benefits of using the calculator:
Helps in knowing loan affordability
After all, every loan needs to be taken with wise and calculative steps. Furthermore, you need to know the exact EMI amount before committing to it.
Helps in deciding the loan amount
In fact, the loan amount is the main liability on you. Subsequently, this calculator will portray a true picture of your liability and the fringes coming with it so that you can decide wisely.
Helps in planning out loan repayment
The EMI amount and interest rate estimations can be done with this calculator. In brief, you may choose if you should go for monthly, annually or even quarterly repayments when you know the cost of one EMI.
How is EMI Calculated?
The mathematical formula for calculating EMIs is = [P x R x (1+R)^N]/[(1+R)^N-1].
Here,
- ‘P’ represents the principal or loan amount
- ‘N’ refers to the number of monthly instalments
- ‘R’ is the interest rate per month. Consequently, if the rate of interest per annum is 9%, then the value of ‘R’ will be 9/(12 x 100)
How to use Home Loan EMI calculator?
The process is very simple. All you need to do is follow these steps–
- Click to go the Housing Loan EMI Calculator
- Place the loan amount, rate of interest, and tenure (in months)
Hey! You are done. The tool will instantly generate your EMI amount (payable per month).
To Sum up
Before making a commitment, you need to plan your finances in the right way. Consequently, place the details on the online tool to check if you are in a state to accept the financial commitment. Good planning always gives better result.
This blog intends to explain why is it important to compute an understand the EMI amount before availing the loan.
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