Several recent surveys have testified the upsurge of housing
loan demand in India. For instance, one of such surveys noted that in 2020,
India's home loan ticket size expanded to Rs.26.41 lakh from Rs.23.84 lakh in
2019. After all, the tech-savvy generation is quite aware of the benefits of
borrowing instead of depleting their savings on purchasing a home.
Further, introducing financial planning tools such as a
housing loan EMI calculator has significantly eased out the entire
borrowing process. The utilisation of this tool, in particular, simplifies the
repayment of debt without straining personal finances.
What is an EMI calculator?
This calculator is a digital tool that allows potential
borrowers to compute their loan repayment liability by using different
parameters. In effect, it helps compare the home loan terms offered
by various financial lenders and allows users to arrive at a conclusion. The
primary purpose of using a housing loan EMI calculator is
to mitigate loan planning for borrowers.
Benefits of using housing
loan EMI calculator
There are several benefits of using an EMI calculator
before taking a home loan. Following is a look at some of these -
- Beneficial
for loan management
The tool offers a detailed record of interest outflow, total
payable amount, EMIs in no time. A thorough account of such information helps
an individual to plan his/her finances effectively.
Borrowers can also utilise this tool to plan out hassle-free
repayment and pay off their debt timely.
- Accurate
and easy calculation
Borrowers need to enter the amount they want to borrow, rate of
interest and loan tenor to the calculator. Precise results will be given as per
the details entered.
An individual can try calculating EMI for a home loan
manually. But it is time-consuming and leaves substantial room for mistakes.
An EMI calculator for a home loan will give error-free results
easily. The formula used by these calculators is -
EMI = [P × R × (1+R) ^ N] / [(1+R) ^ N – 1]
where,
P stands for principal loan amount
R denotes the rate of interest charged on the amount
N represents repayment tenor or the number of instalments
- Opting
for the right tenor
EMI makes loan repayment convenient. After acquiring a basic
idea of the monthly EMIs using the tool, an individual can select a
suitable tenor. One can either pay higher EMI by opting for a short tenor
repayment or pay a smaller EMI for a longer period.
Opting for a longer tenor, however, increases the total interest
outgo.
- Comparing
rate of interests
To avail the best interest rates and maximise savings, a
borrower needs to have a comprehensive idea about the products offered by
different HFCs. This tool helps to calculate the amount payable under
various home loan interest rates levied
by lenders. This helps to narrow down the best loan option for the borrower.
Existing borrowers can also make use of this calculator and seek
revision of their loan terms through home loan balance transfer.
How to use the tool?
The home loan calculator is available across the
websites of all leading HFCs. Follow the below steps to access it -
Step 1 - Visit the official website
of the particular lending organisation.
Step 2 - Navigate to the home loan
EMI calculator
page.
Step 3 - Enter the loan amount,
tenor, and the interest rate applicable.
A detailed and error-free result of EMI amount, net interest
payable, and repayment amount (interest and principal) will appear instantly.
These calculators, offered by leading NBFCs, have certainly
simplified the entire borrowing process for individuals.
These financial institutions also provide pre-approved offers on
financial products, including home loan and loan against property to streamline
the application process. Check your pre-approved offer now by
submitting required details such as name and contact number.
The dream to build your dream home is only feasible with proper
financial planning. The home loan eligibility calculator simplifies the
process.
With so many options available, it is quite commonplace to make
a wrong decision in haste. Therefore, it is crucial to use a housing loan
EMI calculator to figure, compare and then only take a subsequent decision
before applying for a home loan.
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