Building a home is a dream come true for millions of people. However, with a home loan, owning a home is possible, and millions of people are taking this option to buy or build their new homes.
The best part about a home loan is that you do not need to pay it at once. You can easily get the principal amount and interest converted into equated monthly instalments (EMI) and pay the loan during its tenure.
You might have wondered about how all of this is calculated. Is it possible for you to know the EMI before applying for the housing loan?
The answer is yes. It is possible with an EMI calculator for home loans. Most people rely on this tool, which is generally available on the lender’s website.
Read on to learn more about this handy tool.
EMI Calculator for A Home Loan: What Is It?
An EMI calculator is a free online tool that can help you calculate the monthly instalment by taking into account the principal amount, the tenure of the loan, and the interest rate charged. They offer close to accurate and credible results.
If you plan to apply for a housing loan, you should use the EMI calculator to know the EMIs. It will help you plan your finances better.
For example, an EMI calculator would let you choose the suitable repayment tenure based on your monthly repayment capacity for the amount of loan you want.
Key Features of An EMI Calculator for A Home Loan
An EMI Calculator offers ease and convenience to home loan aspirants and enhances their home-buying experience. Below are some of its interesting features.
Easy Interface
An EMI calculator is very easy to use. Any home loan aspirant can easily use it. All you need to do is to enter the amount, rate of interest, and tenure of the loan and get the EMI and interest payable. It will also show the total payment (principal + interest).
It lets you choose the right home loan option without the hassle of asking a home loan executive repeatedly.
Accurate Results
A Home Loan EMI calculator offers accurate results over time. You can check the amount of the EMI against every principal amount.Accordingly, a person can check against the available interest rates and tenure to find the best match.
Free and Flexible
These calculators are free to use. You don’t have to pay anything extra to use this option on the lender’s site. Any user can use a home loan EMI calculator on any device easily.
How Does EMI Calculator Work?
The EMI calculator for home loans works on a special formula. If you manually calculate the EMI using this formula, it can be tedious. It would be tiring extra work.
This is where an EMI calculator comes in. You can use this tool before you apply for a housing loan. It provides you with an exact idea about home loan instalments. You can use it to choose the right loan amount and tenure so that you have to pay an EMI that fits your budget.
The formula that a home loan EMI calculator use is as follows:
- EMI= P*R*(1+R)/N(1+R)(N-1)
Where P is the principal amount of the loan, N is the number of years for which the loan is taken, and R is the rate at which the loan is taken.
Takeaway
A housing loan EMI calculator is a useful tool that helps prospective home loan customers know the amount they will have to pay as EMI over the loan repayment tenure. This tool saves you the pain of manually working out all the mathematical details or asking a home loan executive the EMI options several times.
It also helps you choose the right repayment tenure so you can plan an affordable EMI amount to pay.Finally, it’s free and user-friendly. You don’t need any special knowledge to operate it. Try it out now to plan your budget better!
Also Read : Everything You Must Know Before Applying for a Mortgage Loan
