The lockdown and work-from-home scenario have made people dream about purchasing spacious and comfortable houses. However, it is easier said than done. With skyrocketing real estate prices, it’s often very challenging to purchase a house with one’s savings. This is why many people in India rely on home loans. Housing loans help fund the house expenses without creating a hole in the pocket.
However, you must check your affordability before availing a home loan. Borrowing money more than you can afford can significantly hamper your finances in the long run. An easy way to check your repayment capacity is by calculating your EMI. An EMI calculator can help you do so.
Here is a brief guide on Home Loan EMI Calculator and its utility for you.
What Is an EMI Calculator?
An EMI calculator is an online self-help tool that you can use to check your EMI. With an EMI calculator, you can check how much loan you should avail based on your affordability and financial viability. When you input values in an EMI calculator, it displays the EMI value that you would need to pay throughout the chosen home loan tenure. A home loan EMI calculator works on the following formula –
EMI = P × r × (1 + r)n/((1 + r)n – 1)
EMI – equated monthly instalments
P- principal (loan amount)
n- tenure in months
r- interest rate
Benefits of EMI Calculator
- It is simple and easy to use
The EMI calculator is easy and convenient to use. You only need to input the home loan value, interest rate and tenure in the calculator to get instant results. Unlike manual calculations, it is accurate and fast to operate.
- It’s highly accessible
EMI calculator is easily accessible on almost all the lender’s websites. You can use this calculator anywhere, anytime, and any number of times. You can modify the loan amount and tenure to get a suitable EMI for you.
- It helps you make the right choice
An EMI calculator can help you plan your finances effectively. With an EMI calculator, you can compare the lenders based on their interest rates and accordingly choose the best one. An EMI calculator can help you make an informed decision while helping you create an effective budget.
How to Use an EMI Calculator?
Following are the steps to use an EMI calculator.
- Visit the lender’s website and click on the EMI calculator.
- Enter your desired loan value.
- Input the interest rate.
- Enter the loan tenure you want.
- Alternatively, you can also enter the values through the sliders available on the calculator.
- Click submit
- The results will be displayed instantly.
With the details you input, an EMI calculator will display your EMI, total repayment amount, its interest component and amortization schedule.
Now, when you know all about a home loan EMI calculator, you can check your affordability before proceeding with the loan application. While aiding you in financial management, it can also help you repay your loan comfortably and stress-free.