A home loan EMI calculator can be a useful tool for borrowers when calculating the Equated Monthly Installments (EMIs) as it provides a clear idea of the amount that needs to be paid each month. Calculating the EMIs help borrowers make an informed decision so they can plan their repayment accordingly. Read on to know how to calculate EMI for home loan using an online calculator.
All You Need to Know About a Housing Loan Calculator
The housing loan calculator is an online tool that lets you assess your monthly EMIs along with the total payable interest and principal throughout the repayment tenor. For this, the borrower only has to access the calculator and enter the loan amount, home loan interest rate, and the loan tenor. Based on a mathematical formula, the calculator provides the estimated EMI value along with a detailed breakup of the principal and interest.
How to Calculate EMI for Home Loan
Home loan EMI is calculated based on the following formula –
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where,
EMI = Equated Monthly Installment
P = Principal amount,
R = Rate of Interest per month (the annual rate of interest is divided by 12 to get the monthly rate of interest), and
N = Number of installments or loan tenure
It is to be noted that the above formula does not take into account any housing loan processing fee.
Illustration –
Applying the above formula to calculate home loan EMI, one would get the following result –
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
= [4,500,000 x 8.75 x (1+8.75)^30]/[(1+ 8.75)^30-1]
= 35,402
Therefore, the Equated Monthly Installment is INR 35,402.
Principal Amount = INR 45,00,000
Total Interest Payable = INR 82,44,547
Benefits of a Home Loan EMI Calculator
A home loan balance transfer is the process of transferring your existing home loan balance to a new lender. This could be a great option when you are looking for a cheaper home loan interest rate, top up loan for various financial needs, or better borrowing terms. A home loan balance transfer facility has emerged as a smart solution for reducing monthly EMIs and shortening the home loan tenor.
An online home loan calculator comes with several advantages, as listed below –
Easy and Convenient
Using a home loan calculator is very easy and convenient as you only have to enter the values (loan amount, interest rate and tenor) in the required fields. It does not involve manual, complex calculations since the values are determines on the basis of the mathematical formula. Thus, there is no room for errors or miscalculations. It ensures faster results with 100% accuracy.
A Complete Breakup of the All Charges
The online tool helps borrowers get an idea of the financial charges, like total interest payable and processing fees associated with the monthly installments. Since financial institutes and banks display the charges as a percentage of the loan amount, knowing the real value would help understand the actual loan cost.
Comparison Between Various Loan Offers
The housing loan calculator can be used to compare various loan offers from different banks. A comparison between the various loan offers will help results will show you the total cost of each loan along with their respective EMIs. This will help you narrow down on the most feasible option.
A home loan balance transfer calculator is a convenient online tool that provides instant, accurate results as it displays complete details of the repayment tenor, payable interest amount and monthly EMIs that need to be paid along with the money saved.
Opting for a Suitable Tenor
Being aware of the home loan EMIs ca also help borrowers pick right repayment tenor. If one can afford to pay a higher monthly installment, one may opt for a shorter tenor and repay the amount at the soonest. However, if you wish to opt for comfortable EMIs, you may want to go for a longer tenor to allow enough time for easy repayments.
Aids in Information Validation
When negotiating a home loan deal, borrowers can verify the repayment schedule that outlines all the details from the housing loan calculator. However, one must keep in mind that the numbers are likely to differ as lenders often include certain other charges and fees in the EMI calculation.
By choosing a good lender, you can spare yourself the hassle of visiting the branch physically since the entire process can be done online or via call. The lender’s authorized representative will take care of the whole procedure and it is only during the final stage that you will have to sign the housing loan agreement and complete all other formalities to register. The representative will provide doorstep assistance by bringing the agreement papers to you for the ultimate convenience.
Aids in Loan Management
While paying the EMIs, one may use some extra funds to make the prepayments. In addition, The home loan calculator can be use to assess the prepayments that can prove helpful in paying off the loan amount early.
When evaluating EMIs using a home loan calculator, make sure you take all the parameters into consideration, such as the principal interest rate, repayment tenor, prepayments, processing fee etc. Once you know how to calculate EMI for home loan, get in touch with a lender who has a good market reputation. Bajaj Finserv is one of the top lending institutions offering the best EMI options and easy access to a housing loan calculator.
Comprehensive research is essential before choosing the right lender. Compare various home loan plans offered by different financial institutions and choose one that can offer you the best terms and conditions and the cheapest rate of interest to maximize savings.
