The September quarter of 2020 witnessed the delinquency rate for home loans increase by 13 basis points on a y-o-y basis. With such an increase in delinquency rates, it is pretty evident that most financial institutions are encountering a high number of defaulters regarding home loan EMI payments.
A possible reason for such defaults can be not calculating EMIs and planning repayments before applying for a home loan. In this regard, using an online home loan EMI calculator can be extremely helpful in gauging the repayment liability before opting for the credits.
Borrowers can also calculate their EMI amount manually, but the process can be cumbersome.
Ways to calculate home loan EMI
Manual calculation method
A potential borrower can make use of the below-mentioned formula to calculate the home loan EMI manually -
EMI= [P x R x (1+R) ^N]/ [(1+R) ^N-1]
Here, P is the loan amount borrowed,
R denotes the home loan interest rate applicable every month,
N represents the number of monthly instalments.
Nonetheless, utilising this manual calculation method might prove to be inconvenient for a borrower. That is when a calculator for home loan EMIs can present itself as a viable solution.
By using a home loan EMI calculator
Illustrated below are the steps to use a home loan EMI calculator online to compute the repayment liability for a home loan -
Step 1: Fill in the home loan amount to be borrowed.
Step 2: Select the rate of interest applicable.
Step 3: Enter the tenor over which the loan would be repaid.
The home loan EMI calculator would display the payable EMI and interest amount after completing the final step. This calculator also functions as a home loan interest calculator as it allows an individual to know the amount of interest due on a particular loan.
Advantages of using a home loan EMI calculator
Following are the most notable advantages of using a home loan EMI calculator online -
Helps a borrower compare multiple loans easily.
Assists to effectively plan out repayments.
Displays the EMIs to be paid effectively and accurately in an instant.
It is an efficient, user-friendly tool that can be accessed on the go.
Allows a borrower to choose the appropriate loan tenor.
Helps to make an informed decision regarding the loan amount.
Apart from EMIs, given the several factors pertaining to the eligibility criteria of a home loan, an individual might ponder as to how to calculate home loan eligibility. A home loan eligibility calculator would prove to be a highly beneficial tool regarding this matter. It allows a user to check for home loan eligibility along with the amount that can be acquired.
Using the home loan EMI calculator online to determine the payable home loan EMIs in advance would help a borrower settle their debt with ease, making it possible to earn several benefits.
Apart from calculating EMIs before opting for a loan, individuals must also take note of other benefits being offered by HFCs.
For instance, financial institutions provide pre-approved offers which help in simplifying and accelerating a lending process. These offers are provided on various financial products like home loans, loans against property, and more. Borrowers can check their pre-approved offer by providing a few details such as name and contact number.
Hence, it can be concluded that using a home loan EMI calculator online would be highly helpful in choosing the most suitable loan amount to be borrowed. The home loan EMI calculator is readily available on the websites of reputed financial institutions. Thus, if you are seeking a home loan, find the appropriate loan amount for yourself by using this calculator.
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