Ensure Financial Stability with a Home Loan EMI Calculator - Loan Trivia

## Wednesday 15 May 2024

A home loan is a secured loan that financial institutions offer for purchasing a property by keeping it as collateral. A borrower gets high-value funding that they have to repay through EMIs. The financial institutions offer home loan EMI calculators so that borrowers can gauge the amount they have to pay each month and whether or not to prepay the loan.

What is a home loan EMI calculator?

The home loan EMI calculator is an online tool using which borrowers can get accurate estimations of their EMIs. This tool takes into consideration details like loan tenor, interest rate, and loan amount to compute the EMI.

How to calculate the total EMI for a home loan?

If a borrower wants to calculate the EMI manually, the method is as follows. The formula for EMI calculation is:

EMI = [P*R*(1+R)^N]/ [(1+R)^N-1]

Here,

P = loan amount

N = number of EMIs to pay

R = Interest rate every month

If one puts the values that these letters represent in the formula one can calculate the EMI. For example, if a person gets a loan sanction of Rs.50,00,000, where the interest rate is 8.7% and the tenor is 20 years (240 months), the equation will read:

EMI= 50,00,000 * 0.00725 * (1 + 0.00725)^240 / [(1 + 0.00725)^240 – 1] = 44,026

If we multiply the EMI by 240 (the tenor) we would get the total payable amount:

Rs.44,026 x 240 = Rs.1,05,66,275

This is evident that this method of calculation can lead to inaccurate results. Most importantly, it will consume a lot of one’s time and energy. After dealing with a heap of numbers in a single situation one may not want to compare other loan opportunities with different interest rates and tenor.

Therefore, with a reliable home loan EMI calculator online borrowers can save themselves from all this hassle.

How to use a home loan EMI calculator?

Follow the steps below to use this tool and find out the EMI for the applicable loan amount:

Step 1: Add or select the loan amount.

Step 2: Type or pick the repayment tenor.

Step 3: Add the home loan interest rate to the box or slide to choose an interest rate.

The tool will calculate and show a user the tentative EMI amount. Based on this result, they can customise their home loan and make the most out of it.

What are the benefits of using a home loan EMI calculator?

A home loan EMI calculator provides a lot of benefits to a home loan applicant. Here are the most important ones:

• It provides an applicant with a lucid understanding of payable charges such as processing fee value and total interest payable. Knowing the actual value will help one determine the true cost of a loan.

• Using this tool an applicant can compare various loan offers (from multiple lenders).

• It will also help an individual choose the right tenor for the loan repayment.

Therefore, if an individual is planning to get a home loan they should know that many financial institutions offer pre-approved loans to their long-standing customers for products including housing loans and personal loans. Interested individuals can check their eligibility for such offers by visiting the lender's website and filling out the required form. This offer will help applicants get the loan quicker without much hassle.

Home loan EMI calculators help borrowers make better financial plans considering their daily, monthly, and yearly expenses. It will help them determine the highest loan amount they should aim for, choose the right tenor, and plan for the loan repayment.