How Can A Home EMI Calculator Help With Loan EMI Management?
A home loan is a high-value loan that can last up to 20 years or more. It keeps you liable until the principal loan amount and interest are fully paid. Therefore, before taking a home loan, you must consider your finances because it is one of the long-term loans offered by financial institutions.
When you take a loan, a set percentage of your income is used to make equated monthly instalments, also known as EMI payments. To better understand your EMIs, you can use the home loan EMI calculator, a freely usable online tool.
Here is all you need to know about the home loan EMI calculator and its many advantages before applying for a home loan.
What is a Home Loan EMI Calculator?
A home EMI calculator is a free online tool that can assist you in calculating the amount of EMI you will pay on your loan. It helps you determine the EMI due over a specific duration at an interest rate determined by the loan amount and term. This tool is freely accessible on the websites of reputed financial institutions and banks. The calculator it has three sections:
- Principal Amount
- Loan Tenure (in months)
- Interest Rate
To calculate an affordable EMI, you can enter countless permutations and combinations of tenures or interest rates. In addition, you can keep entering various principal loan amounts, interest rates, and duration (by adjusting your down payment) and keep track of the payable EMIs based on these figures.
How does the Home Loan Calculator work?
Depending on the kind of calculator available on the bank’s website, you can either enter the numbers directly into the calculator or use the slider to change the variables, i.e., tenure, principal loan value, and interest rate.
To choose the loan amount, duration, and interest rates, only drag the slider with the mouse from left to right. While the calculator quickly and accurately calculates the EMI amounts, you can keep changing and adjusting the figures.
Benefits of Using a Housing Loan EMI Calculator
Let’s explore why using this calculator before applying for a loan is crucial now that you understand how to calculate a home loan EMI.
1. It gives you an accurate break-up of the financial fee
Your home loan’s various financial charges, such as the total payable interest, the loan processing fees, the stamp duty fees, etc., can be better understood with the help of the home EMI calculator.
Lending institutions typically present these sums as a percentage of the principal loan amount you intend to borrow because they are usually quite large. But knowing the loan’s actual value following the deduction of any fees will help you to determine the loan’s terms.
2. It eliminates manual calculations
Manual EMI calculation is difficult and time-consuming. For example, when EMIs calculations are for 20 years, then errors are quite possible. And any mistake made during manual calculations could make things difficult for you when you go to the loan provider.
You can accurately obtain results using the home loan EMI calculator. In addition, the computations are 100% accurate, so you can keep entering different combinations of interest rates and tenures.
3. You can compare various home loan rates
Each lending institution has a different interest rate. Therefore, the EMIs and fees related to the loan get reduced even if the loan amount varies by just 0.02%. With the help of the EMI calculator, you can quickly compare the interest rates of loans provided by various lenders.
4. You can plan your finances
The EMI calculator gives you an idea of the EMIs that will be due for the loan. As a result, you can proceed with budget planning while keeping your EMI payment in mind. Thus, a calculator can help you organise your budget without affecting your other necessary monthly expenses.
A crucial part of your life is financial planning, particularly if you have several expenses to cover, like rent or utility bills. But not all unforeseen events can be predicted, and you might need more money. A home loan EMI calculator can help you plan your expenses before taking a home loan so that you can manage your EMIs without any problem.