The equated monthly installment or EMI mainly depends on two important aspects, namely, the rate of interest and loan tenor. And, based on this particular amount, borrowers usually make decisions in terms of availing of loans from a suitable lending institution. Since there are several financial liabilities one has to bear throughout the month, it is wise to have a clear idea of the exact EMI amount to handle those expenses conveniently.
A home loan EMI calculator works as a financial tool that accurately computes the EMIs a borrower needs to pay every month to repay the loan. When it comes to a home loan, the monthly installment plays a crucial role since the borrowers usually opt for a longer tenor to handle the significant principal and interest liabilities. Consequently, an EMI calculator helps you to compare lenders and pick an affordable option.
Calculation method of home loan EMIs
A home loan calculator collects three necessary components – loan amount, tenor and rate of interest to calculate the precise amount you will be paying on a monthly basis. Since this particular type of loan involves obtaining a large sum, borrowers inevitably look for ways to get better home loan interest rates.
Therefore, make sure to compare different lenders and their rate of interests to calculate the EMIs before settling for one. Here is the formula for EMI calculation:
EMI = [P x R x (1+R) ^N]/ [(1+R) ^(N-1)]
Here, P stands for your principal amount obtained from your preferred lender, R stands for the rate of interest a financial institution charges, and N represents the total loan period during which you will be paying the home loan EMIs.
The EMI calculation usually varies depending on the lenders and the market rates. For instance, the fixed interest rate allows you to have a clear idea from the very beginning while a floating interest rate keeps changing depending on the market situation. Therefore, it is wise to research enough before opting for one and utilise the housing loan EMI calculator available on every financial website.
Steps to use an online EMI calculator
The formula of EMI calculation gets complicated at times, especially when you are comparing different financial institutions to find one that suits your repayment capacity. During financial emergencies, the best way to compute the EMI is to use a home loan EMI calculator. Here are the steps you need to follow:
- Visit the official portal of your preferred lender and find the home loan section.
- Click on the home loan calculator option.
- Make sure to gather all the information regarding the offered rate of interest, repayment period and your loan amount. Enter all these details to get the exact payable amount and monthly instalment amount as well.
With easy access to the home loan interest calculator, it has become comparatively easier to plan monthly expenses. However, popular HFCs also extend pre-approved offers to make financing even more hassle-free. These offers are available on different financial products like home loans, loans against property, etc. You can check your pre-approved offer by submitting necessary details like name and contact number to get attractive deals on home loans. Housing loans in India generally involve large sums of money, and they can help you build or buy your dream home. Therefore, make sure to meet these parameters to get your home loan approved instantly. Also, use the home loan EMI calculator to evaluate how factors like down payment size, tenor, etc. make your EMIs easily manageable.