Plan Your Finances Well By Calculating Home Loan EMI
New Delhi : A home loan helps in buying the house of your dreams. But considering that a home loan repayment can go upto 30 years, it is also a big financial commitment, which must be treaded carefully. Taking home loan without considering current financial situation and future risks can strain your budget and impact your other financial goals a few years down the line, making it important to be aware of what you are getting into. Knowing the approximate amount of your home loan EMI beforehand can help you plan all your budgets well in advance. You can ease your problem with the help of a Home Loan EMI Calculator.
What is a Home Loan EMI Calculator?
A Home Loan EMI Calculator is an online tool that calculates the EMI payable to a lender. It consists of 3 input fields, loan amount, interest rate and loan tenure. It is on the basis of the values entered in each of these input fields, the calculator gives the result. You can change these values as many times as you want till you get the ideal EMI.
What are the Benefits of Using a Home Loan EMI Calculator?
The benefits of using a home loan EMI calculator are listed as below:
• Helps you plan finances: With the help of an EMI calculator, you can plan your finances well in advance. It gives you an approximate EMI amount based on the values you input. This will help you in deciding the EMI amount you can comfortably pay your lender without straining your budget or yourself.
• Helps in getting loan approval: The EMI calculator not only helps you know the ideal EMI amount you can comfortably repay but also the loan amount you can afford. Resultantly, when you apply for a home loan by asking for the loan amount you can afford the chances of your loan approval increases.
• Simplifies budget planning: The EMI calculator also helps in streamlining your budget. Once you know the EMI amount, you will be able to plan and manage your budget to ensure timely home loan repayment. Thus, reducing the chances of money crunch and loan default.
• Saves time: Home loan EMI can be calculated manually but that will consume a lot of your time. With the help of an EMI calculator, you can get results in within a second. Since it is user-friendly, anyone can use it as many times as they wish without wasting time figuring out its working.
How a Home Loan EMI Calculator Works?
Using a Home Loan EMI Calculator is simple. To use it all a user has to do is enter the following inputs:
• Loan Amount: The amount you borrow for your lender. The home loan amount you are eligible to borrow depends on the market value of the property and your repayment capacity. Depending on the lender and the home loan scheme, you can get only up to 90% of the property value as a loan. The higher the loan amount, the higher will be the loan EMI.
• Interest Rate: The rate at which the lender will give you the loan. The interest rate varies from one lender to another. It also varies as per the home loan scheme. There are 2 types of home loan interest rates levied by lenders, fixed and floating interest rates. The fixed interest rate remains unchanged throughout the loan tenure. Therefore, the EMIs remain the same throughout the loan tenure. On the other hand, the floating interest rate fluctuates; hence, the EMIs vary with the change in the rate. The lower the interest rate, the better. Therefore, it is important to compare interest rates across lenders before applying for a home loan.
• Loan Tenure: The total period given to you for repaying your loan. Home loans have the longest tenure, extending up to 30 years. You can choose to repay the loan as long as you want. But the longer tenure you choose, the more interest amount you will have to pay on your loan.
As the values are entered, the result will appear within a second. Whatever result you get, make sure that it is less than 40% of your in-hand salary.