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An EMI Calculator is a tool that aids in calculating the monthly instalments (EMIs) for your loan. It can help you make an informed decision about buying a new house. A housing loan EMI calculator helps plan your cash flows for servicing your home loan.
What is Home Loan EMI?
EMI stands for Equated Monthly Installment. It includes paying off the original balance of your bank loan and any accrued interest. To lower the EMI, a longer loan term (up to 30 years) is recommended.
How is EMI on Loan Calculated?
The formula for EMI is –
P x R x (1+R)^N / [(1+R)^N-1]
P = Principal loan amount
N = Loan tenure in months
R = Monthly interest rate
The interest rate on a home loan is calculated monthly.
R = Annual Rate of interest/12/100
Consider this: If rate of interest is 7.2% p.a. then r = 7.2/12/100 = 0.006
For instance, if someone takes out a loan for 10,00,000 at a 7.2% annual interest rate for 120 months (10 years), their EMI will be
EMI= ₹10,00,000 * 0.006 * (1 + 0.006)120 / ((1 + 0.006)120 – 1) = ₹11,714.
The total amount payable will be ₹11,714 * 120 = ₹14,05,703. The principal loan amount is ₹10,00,000, and the Interest amount will be ₹4,05,703.
Manually calculating the EMI using the formula can be time-consuming. But, an EMI Calculator can help you calculate your loan EMI with ease.
How can EMI plan benefit home purchase planning?
A housing loan EMI calculator clearly explains the amount that needs to be paid towards the EMIs and helps make an informed decision about the outflow towards the housing loan every month. In addition, you can determine the loan amount that may be accessed and evaluate the amount of the property’s cost and the need for personal contributions. Therefore, in order to determine your eligibility for a house loan and better plan your home-buying process, it is imperative to understand the EMI.
How to use an EMI Calculator?
To calculate your EMI, you need to enter the following information:
- Loan Amount
- Loan Tenure
- Rate of Interest
What is the Home Loan Amortization Schedule?
Loan amortization means paying off the debt with consistent payments throughout the loan. An amortization schedule for a mortgage is a table that includes information on the principal, interest, and payback amount.
Based on the loan tenure and interest rates, EMI calculators provide a practical knowledge of the proportion of the principal amount to the interest due. In addition, the amortization table in the home loan eligibility checker also explains the repayment schedule.
Benefits of Home Loan EMI Calculator
A Home Loan EMI calculator has many benefits. Here is a list of them:
Lets you Make Long-Term Plans
It might make it easier to budget your money and show you how much you need to set aside each month to pay off the loan. Knowing your budget will help you stay ahead of your spending and help you decide how to manage your money.
Transparent Amortization EMI Schedule
Using this calculator, you may view a precise breakdown of the EMI, including the principal and interest. Easy to use: Only the loan amount, interest rate, and tenure must be entered. No tricky math or sophisticated calculations. The EMI calculator will handle the actual computation.
The calculator is easily available
Calculating your home loan EMI amount and payback schedule is simple and convenient because the home loan eligibility checker is free to use.
Simple, practical, and precise
Unlike manual calculations, where there is a chance of inaccuracy due to human error, EMI calculators are easy to use and 100% accurate.
Makes Loan Comparison Simple
To make the best possible choice, you must use a home loan EMI calculator to compare loan offers from different banks. The results will show the total cost of each loan and its associated EMIs.
Helps to Choose a Suitable Loan Tenure
You can choose a shorter tenure and pay off your loan as soon as possible if you can afford to pay a higher EMI. If not, you can prolong your loan time and pay a more manageable EMI.
Final Reflections
The monthly EMI payments are typically the primary worry for most borrowers regarding house loans. A house loan EMI calculator might be quite helpful in this situation. In addition, providing a thorough breakdown of your monthly EMI payments across various loan tenures and interest rates enables you to better plan your finances.
Compare various home loan offers from lenders using a housing loan EMI calculator to find the one that best suits your requirements.
