A Home Loan is a great commitment financially that often lasts decades; thus, borrowers should do extensive financial planning beforehand. One of the simplest methods to plan your House Loan trip is to use a Home Loan Calculator. The calculator is a valuable online tool offered for free on most loan provider websites. You can use it to generate an approximate EMI plan based on your loan amount. Not only the calculator provides you with an indication of how viable your mortgage loan request is, but it also reduces human error risk.
Borrowers can use the EMI Calculator to test the different loan amounts and tenor combinations to get the best EMI. A Home Loan Calculator, in basic terms, allows a person to construct a repayment schedule and plan their loan trip accordingly.
What Exactly Is An EMI Calculator For A Home Loan?
A mortgage loan EMI calculator is essentially an internet application that can assist a loan borrower in calculating the EMI amount due on a House Loan. The mortgage loan EMI calculator has three key components:
- The principal amount field
- The field of loan tenure (in months) &
- The field of interest rates
The principal amount is the amount you desire to borrow. Suppose you want to buy a house worth one crore; you must include your down payment and the borrowed money. For example, if the house is worth INR 1 Crore and you can afford a 25% down payment, then INR 75 Lakh would be the principal loan amount. The interest rate will be applicable on the INR 75 Lakh, and the EMI amount will be determined by the principal loan amount, interest rate, and tenure.
Interest needs to be paid on the loan amount sanctioned. The interest rates of each loan provider differ. Choose the loan provider who provides the best rate, and insert the amounts accordingly in the calculator. Most lending institutions provide House Loans with interest rates of 8.50% or higher. The borrower can also choose between a fixed and adjustable interest rate.
You must also enter the loan duration in months. Because Home Loans are high-value loans, you can receive them for terms ranging from 15-20 years. However, remember that a long-term loan carries a hefty interest rate.
The calculator assists the borrower in understanding the EMI payable over a certain duration at an interest rate set by the loan amount and tenure. This tool is available for free on all loan provider websites. To calculate a feasible EMI, the borrower can enter an infinite number of permutations and combinations of tenures or interest rates. Enter other principal loan amounts (by altering your down payment), tenures, and interest rates, and keep track of the payable EMIs depending on these values.
How Does The Mortgage Loan Calculator Work?
Based on the sort of calculator accessible on the loan provider’s website, you may either enter the figures or use the slider provided in the calculator to alter the values for the principal loan amount (P), the term (N), and the interest rate (R). You can select the loan amount, tenure, and interest rates. You can continue to change and edit the data as the calculator computes quick and accurate EMI amounts in seconds.
How Reliable Are the House Loan Calculator Results?
Manually calculating EMIs is both hard and time-consuming. When calculating EMIs for 20 years, you are sure to make calculation errors. Any errors in manual computations can get you in hot water when you contact the loan provider. Also, you go through your calculations numerous times to guarantee that you have correctly estimated the EMI amount. The house loan calculator provides precise results in a matter of seconds. You can keep entering different combinations of tenures and interest rates and be confident that the calculation is always correct.
Who Can Use the EMI Calculator for a Home Loan?
Anyone considering purchasing a home can use an EMI calculator to calculate the size of their EMI.
In general, it is advised that you calculate your EMI at a higher interest rate to save for future interest rate hikes.