How To Calculate Home Loan EMIs? - Loan Trivia

Monday 20 August 2018

EMI calculator is a simple tool. It can be tweaked to get various combinations of loan amount, tenure and interest rate so you can find the affordable repayments. Knowing your EMI in advance helps you to better plan your finances and take informed decisions. Let's explore the facts about Housing Loan EMI calculator to get a better idea.

The Housing Loan EMI Calculator works on 3 main criteria -

- Loan amount availed
- Tenure of the loan
- Home Loan rate of interest being charged by the lender

The formula used for calculating EMI is,

EMI = [P x R x (1+R)^N]/[(1+R)^N-1] here P represents the loan amount or principal, N is the number of monthly instalments and R is the interest rate per month, i.e. suppose the rate of interest per annum is 11% then the value of R will be 11/(12 x 100).

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To calculate,

1. Click to go the EMI Calculator on the lender’s official website.
2. Choose the Loan Amount, Rate of Interest and Tenor (in months)
3. Your EMI will appear below

Amortization Schedule -

Your Home Loan amortization schedule is a table/ record which details all periodic payments on your loan which is generated via an amortization calculator.

Amortization is the process of repaying a debt from a loan via regular payments over time. It is the total tally of loan payments that shows the amount of interest and principal contained in each payment until the loan is completely paid off.

You can claim tax deductions under Section 80C of up to Rs.1.5 lakhs on the principal amount repaid via your EMIs annually. You can get tax deductions under Section 24 up to Rs. 2 lakhs on the home loan rate of interest component that you repay annually via your repayments.