Possessing a home is widely regarded as a sign of accomplishment in our society. However, with growing real estate prices, acquiring a property in a single payment might be rather financially hard for an individual. A home loan is one of the most efficient methods of obtaining funds for the purchase of a house. A home loan is a one-time payment made to a financial institution or bank for the express purpose of acquiring a property.
A house loan is an efficient way to get financing for the purchase of a property without having to tap into savings. The purchase of a house or property is a long-term commitment, which is why it is essential to consider the interest component, since the longer the loan period, the more expensive the loan. Numerous financial organizations provide competitive and fair interest rates to ensure that the customer’s house loan is affordable.
Borrowers planning to avail of a home loan must use a home loan EMI calculator to understand their financial obligation even before taking a loan.
Reasons to Use an EMI Calculator for Home Loans
Financial organizations offer home loans on two types of interest rates: floating and fixed. Customers may choose one of these based on their individual requirements. Numerous banks and financial organizations provide competitive interest rates to help customers afford a house loan.
A house loan is repaid through equated monthly installments (EMIs), which make loan repayment pleasant and uncomplicated for the consumer. Monthly repayment of a loan simplifies the repayment procedure for the client since they may pick the loan’s term and choose one that is not stressful for them. If a consumer needs to use a house loan EMI calculator to determine the EMI amount, they just need to visit the financial institution’s official website.
Five Advantages of Using an EMI Calculator for Home Loans
Loans have become ingrained in everyone’s lives. Whether it comes to purchasing a home or a car or managing your children’s education abroad, loans are an excellent way of arranging money quickly. Borrowers just need three things — the loan amount, the loan term, and the interest rate — to calculate their home loan EMI using a home loan calculator.
The following are five advantages of a house loan EMI calculator.
Calculation made simple
Any client wishing to calculate their EMI repayments should only input the loan amount, interest rate, loan tenor, and processing fee (if available) and they will get the result instantly. The housing loan interest calculator will perform the computation and will offer the EMI amount within seconds.
Appropriate tenor selection
After determining the specific EMI amount, an individual may pick the appropriate loan tenor. They can pick between paying a high EMI and choosing a short tenor duration to pay off the loan fast or paying a lower EMI and extending the loan length.
Advantageous for loan management
While making EMI payments, a client may occasionally have some more cash available for prepayments. If a client wants to examine the financials and determine the effect of a prepayment on paying off the loan before the term expires, a home loan EMI calculator can assist.
Choosing between loan offers
The loan calculator enables customers to compare loan offers from several banks. The results indicate the entire cost of the loan as well as the associated EMIs. This assists the consumer in narrowing down their options and selecting the loan that best meets their unique set of requirements.
When calculations are performed manually, certain errors may occur without the client recognising them, resulting in inaccurate results. An online housing loan EMI calculator will never provide inaccurate results; all calculations are performed with utmost precision.
Formula for Calculating the EMI on a Home Loan
Here’s the formula for EMI calculation on a home loan.
EMI = [P x R x (1+R) ^N]/[(1+R) ^N-1]
E- Equated Monthly Instalment,
P- Principal or loan amount,
r- Interest rate per month, and
n- Number of monthly instalments or loan tenor in months.
(This calculation does not include the bank’s home loan processing cost.)
How to Use an EMI Calculator for a Home Loan?
Once you have the three inputs – principal loan amount, house loan rates, and loan tenor – you can enter them into the housing loan EMI calculator in their corresponding spaces. Alternatively, depending on the sort of calculator accessible on your lender’s website, you can alter the values using the sliders. Within seconds after entering the three inputs, the calculator will reveal the home loan EMI amount.
Additionally, you may keep changing and tweaking the values, and the calculator will provide quick and precise results, allowing you to customize your house loan to your specific needs.