If one decides to take out a Home Loan, they must first determine the repayment capacity to avoid financial difficulties. In this case, Home Loan interest calculators help calculate the equated monthly instalment (EMI) of a Housing Loan. It’s a free, user-friendly tool that a borrower can use at any moment to figure out how much they’ll have to pay in monthly instalments. The Home Loan EMI Calculator asks for a little data about the borrower’s loan and returns a precise result.
The first step towards effectively managing the timely repayment of the loan is to ensure that the borrower borrows a loan amount in line with their repayment capabilities. This entails choosing an EMI amount that an individual can easily pay in a disciplined and timely manner without straining their finances. While manually calculating your home loan EMI amount is possible, the process is tedious. Moreover, considering the seriousness of the decision, even a slight calculation error can have a detrimental effect on the finances. So, it may be smarter to calculate home loan EMI online, using a home loan interest calculator.
Formula to calculate home loan EMI
The EMI amount depends on the loan amount or principal amount, the rate of interest and the repayment duration of a housing loan. Considering these components, you can calculate home loan EMI using the following formula.
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where P is the principal
R is the rate of interest
N is the repayment tenor of the loan in months
For instance, if P = Rs. 20 lakh, R = 12% and N = 240 months, then your EMI outgo every month will be Rs. 22,022. One can calculate home loan EMI in an instant, without any hassle, and most importantly, without any risk of error, using a home loan EMI calculator in just three simple steps.
How to use a home loan EMI calculator
Once the borrower has found a home loan interest calculator online, all they need to do is enter their desired loan amount, repayment tenor and rate of interest in the calculator. Within seconds, the home loan calculator displays not only the EMI amount but also the total interest payable and the total cost of the loan, that is, principal and interest together. This helps an individual to assess their finances and the cost of borrowing with ease.
Benefits of using a home loan interest calculator are-
- Saves time- When manually calculating Home Loan EMIs, one must go through a lengthy computation process that may result in inaccuracies. By calculating EMI in a matter of seconds with an online EMI calculator, one can avoid lengthy and time-consuming calculations. The EMI calculator reveals the Home Loan EMI as soon as the borrower enters the data of their loan.
- Gives accurate results- Calculating EMIs for Home Loans by hand is a time-consuming process that necessitates sophisticated calculations, and there’s a chance one can overlook anything, resulting in inaccuracies in the final result. Furthermore, inaccuracies in computations may cause the Home Loan EMIs to alter, and one may make a mistake while choosing a Home Loan. As a result, handwritten computations are not always reliable. It is always best to use a Home loan EMI calculator to get accurate results.
- Helps in planning the finances- EMIs assist in determining one’s repayment capacity. An individual may determine the EMI amount that is manageable and comfortable paying monthly without compromising their budget by utilising numerous permutations and combinations to the parameters of the Home Loan calculator. As a result, it will assist them in creating a methodical financial strategy.
- Offers a list of housing deals- When one uses the Home Loan interest calculator to calculate their EMI, it generates a list of Home Loan quotations that are suited for their needs and eligibility. This list contains information about each loan, such as the interest rate, term (or period), and principal loan amount, to assist them in making an informed selection. From the Home Loan plan, one can pick the best loan for themselves.
Various banks and financial institutions use home loan calculators on their websites to attract more customers and attain their satisfaction. It is one of the most reliable ways to receive a modest home loan interest rate starting at just 6.75% and on fair terms. To get started, use the home loan eligibility calculator to check if you qualify, and apply online today.