Are you applying for a home loan? But are you still confused about the structure of EMIs you will have to pay? Don’t worry! The EMI calculator is here to help you. It is a simple online tool that acts as your house EMI calculator to solve complex calculations in seconds. A home loan EMI calculator is available on the website at almost all banks that offer home loans and other financial institutions that provide mortgages.
An EMI Calculator – What is it?
An EMI calculator is a tool that’s available online. It can assist a loan borrower in calculating the EMI amount due on a home loan. This calculator is simple to use. For those who take out home loans, a home EMI calculator can be a helpful tool for financial planning.
The home loan EMI calculator has three main parts, namely:
- The Principal amount
- The interest rate
- The loan tenure
The calculator aids the borrower in understanding the EMI due over a specified term at an interest rate based on the loan amount and term. To calculate an affordable EMI, the borrower may enter countless permutations and combinations of tenures or interest rates. You can keep entering various principal loan amounts, interest rates, and terms (by adjusting your down payment) and keep track of the payable EMIs based on these figures.
How is the EMI Calculated on Your Home Loan?
The question of how to calculate home loan interest bothers every borrower. But thanks to the EMI calculator, it is only about a few clicks. Here’s how the calculation of your EMI goes through:
Formula: P x R x (1+R)^N / [(1+R)^N-1] where-
- P = Principal loan amount is the sum that you borrow
- N = Loan tenure in months
- R = Monthly interest rate, i.e., R = Annual Rate of interest/12/100
What is the Benefit of Making EMI Calculations?
When you take out a home loan, you will have to make EMI payments for a long time—up to 30 years. Paying EMIs will significantly impact your finances month after month. Before, it was challenging to estimate your monthly installment until you had a lengthy conversation with a lender representative. But using an EMI calculator has made it simple.
A clear understanding of the EMI payment amount is made more accessible by the home loan calculator, which aids in making an educated choice regarding the amount to be put toward the loan each month. This aids in determining the maximum loan amount you can manage, the amount of the property’s cost, and the need for personal contributions. Therefore, understanding the EMI is essential for determining your eligibility for a home loan and better planning your home buying process.
Benefits of an EMI Calculator for Your Home Loan
Now when we know how essential it is for us to use EMI calculators while applying for home loans. Let’s learn about the advantages of an EMI calculator:
- It provides a thorough breakdown of the financial charges: Your home loan’s various financial costs, such as the total payable interest, the loan processing fees, the stamp duty fees, etc., can be better understood with the aid of an EMI calculator. Lenders typically present these sums as a percentage of the principal loan amount you intend to borrow because they are frequently significant. You can determine the loan terms by knowing the loan’s actual value after subtracting any fees.
- Prevents you from having to make manual calculations: Manual EMI calculations are complex, challenging, and time-consuming. Calculating errors are inevitable when calculating EMIs that last for 20 years. You can quickly and accurately obtain results using the home loan EMI calculator. The calculation is 100% accurate, so you can keep entering different combinations of interest rates and tenures.
- Using an EMI calculator, you can compare your options and make the right decision: Every lender offers a different loan interest rate. Using an EMI calculator, you can compare various home loan rates. Even if the difference between the two loans is marginal, it can significantly reduce the monthly EMIs and other fees. Using the EMI calculator, you can quickly compare lenders’ various interest rates.
Therefore, if you are going to take a home loan, remember to use the EMI home loan calculator. It will save your time and money, along with helping you in making an informed decision.