A loan against property is a safe and smart way of arranging money in times of financial need. However, since this type of loan involves a person pledging property as collateral or security, one must access loans against property only after careful consideration and proper financial planning. A loan against property or mortgage loan calculator helps greatly in this regard.
A land mortgage loan calculator is an easy-to-use tool that helps you calculate your EMIs for a specific loan amount. Other than the EMIs, the mortgage loan calculator also gives one an amortisation schedule which gives one an idea of the periodic loan payment.
Now before we go ahead and tell you how a loan against property calculator can help you avail of the maximum loan amount, let us understand what is a mortgage loan or a loan against property.
What is a Mortgage Loan or a Loan Against Property?
A loan against property, often also known as a mortgage or property loan, is a type of secured loan. Under this loan offer, lenders accept a residential or commercial property as collateral and sanction a specific loan amount against the property. The ownership rights to the property stay with the borrower, but the lender can sell the property for loan recovery in case of default.
Mortgage loans or loans against property offers several advantages. Being secured in nature, these loans are often sanctioned at low-interest rates. The funds come with zero end-use restrictions and borrowers get ample time to repay these loans. These benefits have made loans against property or mortgage loans quite popular.
Mortgage Loan Calculator: How Does It Work
A mortgage loan EMI calculator calculates the EMIs, or equated monthly instalments, based on three factors: the loan amount, the loan term, and the interest rate offered.
The loan amount, also known as the “principal,” refers to the amount of money that a borrower hopes to get in return from the lender for pledging their property as security.
Loan tenor refers to the number of months/years over which a borrower plans to repay their loan. Borrowers must remember that a long tenor means low EMIs but a high total interest outgo. On the other hand, a short tenor means high EMIs but a low-interest outgo. So, borrowers must try to figure out the right combination of tenor and EMIs so that their EMIs remain affordable and the total interest outgo also stays within the limit.
The rate of interest is one of the most crucial factors that determine how expensive or affordable a loan will be. The interest rate depends on several factors, including the resale value of the property mortgaged, the borrower’s income profile, age, CIBIL score, etc. Borrowers must try their best to avail of the lowest interest rate possible as this allows them to keep their loan EMIs on the affordable side.
If you wish to use a mortgage loan calculator to understand the maximum loan you qualify for, simply input the loan amount you wish to avail of and the tenor over which you hope to repay the loan. Enter the rate of interest offered to you by your chosen lender, submit and the calculator will give you your monthly EMIs within seconds. If you think it will be difficult for you to repay the EMI amount that you see on screen, you can keep changing the values entered into the calculator — reduce the loan amount or rate of interest or increase the loan tenor — until you arrive at an EMI number that you can comfortably repay.
This way, a loan against property calculator or mortgage loan calculator allows one to figure out the maximum loan amount they can avail of while keeping their EMIs affordable.
Let us now look at the other benefits of a Mortgage loan calculator.
Here’s Why You Must Use a Mortgage Loan Calculator if You Are Planning to Avail of a Home Loan
It Delivers Accurate Results
Calculating EMIs requires one to use a complex formula, and thus, manual calculations in this regard are prone to errors. Since loans against property are a long-term financial commitment, there is no scope for errors. A loan against property or mortgage calculator can be trusted to deliver accurate results every single time.
The loan against property calculator is easily accessible and is also free. You can use the calculator as many times as you like without paying any fees or charges. Thus, keep hitting the reset button until you arrive at an EMI amount that is easily affordable for you.
You can calculate your monthly EMI against a specific loan amount manually but know that manual calculations take time. Be ready to keep aside at least a few hours for the task. A mortgage loan calculator, on the other hand, is quick. If you use this tool, the calculator will give you your EMI amount concerning any loan value, tenor, and rate of interest within seconds.
It Helps You Plan Your Loan Journey
Use the online calculator to understand your EMI obligation concerning the mortgage loan amount you wish to avail yourself of. Once you know your EMIs, you can plan your monthly budget and make sure you have ample money left for EMI payments each month. Doing this will allow you to avoid late payments and, therefore, a late penalty and a bad CIBIL score.
If used wisely, a loan against property calculator or a mortgage loan calculator is a handy tool that can make your loan journey simple and easy. So, use this tool not just to figure out the maximum loan amount you can avail of by pledging property as security but also to experience a completely hassle-free loan journey.
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