Do you want to determine your EMI in the quickest and most precise manner possible? If yes, consider calculating your equated monthly installment using a home loan EMI calculator. The calculator instantly creates a plan when you enter the tenure, interest rate, and loan amount and calculates the EMI. Read the article to learn more about the calculator, the calculating formula it utilises, and the advantages of using it.
A house loan is a prudent way to finance a home without depleting funds. Because purchasing a home is a time-consuming process, it is critical to consider the interest component. The interest rate rises as the loan term lengthens. Many financial institutions offer their customers attractive and enticing interest rates in order to make home loans more accessible.
What is a Home Loan EMI Calculator?
A home loan calculator is a tool that helps to calculate the home loan EMI at ease. It needs three data – the interest rate, the loan amount and the loan tenure.
Based on these three inputs, the calculator displays the total principal payable, interest payable and amortization schedule. This data helps to strategically make an equated monthly installment plan as per your repayment capacity.
What is the Formula of Home Loan EMI Calculator?
The home loan EMI calculator follows the following formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
P = Principal loan amount
R= Rate of Interest
N = Repayment tenure
Using this formula, the calculator finds the monthly EMI a person has to pay.
Principal Loan Amount: This is the amount you wish to borrow from the bank as a home loan. You need to enter the amount value in the main loan amount bar.
Rate of Interest: In the interest rate bar, you have to mention the interest you would like to opt for. The home loan interest varies from one bank to the other. To save your financial resources, you must know which lender provides the lowest interest rate.
Repayment Tenure: A high tenure means low EMI and high-interest rates. In the repayment tenure bar, you need to mention the number of days, months, or years for loan repayment.
Benefits and Features Of Home Loan EMI Calculator
The home loan EMI calculator has many advantages and features that make them convenient for EMI calculation. Here are the basic features and benefits of using the equated monthly instalment calculator.
- It provides an easier calculation method than pen and paper. Calculating EMI manually might lead to erroneous results. But if it is calculated using an online tool like an EMI calculator, the results are likely to be accurate.
- Many financial charges are associated when paying the home loan. The EMI calculator informs the user about the ideal loan processing charge, the total interest, and the stamp duty fees. Knowing these are essential before taking a home loan from the bank.
- It helps to decide whether you should go for short-term or long-term home loans. Based on the calculator’s results, the user can determine their capability of repaying it to the bank. The user can opt for a short-term and payable home loan if the amount exceeds their budget.
- It assists in comparing the loan offers with other lenders. The home loan rates can vary from one lender to the other. You can cross-compare the charges before taking a home loan from a specific bank. This way, you can narrow down your choices when selecting a lender.
- It helps in financial planning. After determining the loan that you need to borrow from the bank, you can make a financial plan to repay the loan. For instance: If you have to repay a specific loan in two years, you can plan how much you can spend in a month. This strategy will help you cut down on unnecessary expenditures.
- It can make complex calculations easily and within seconds, thus, assisting in time-saving.
- The EMI calculator helps in managing the loans. You can check the prepayments and the financials before the term ends and keep track of them.
- It helps to choose the right tenure for loan repayment.
- It assists in verifying the repayment schedule.
The benefits and features of using a home loan EMI calculator are immense. Since calculating EMIs manually is time-consuming and exhausting, the calculators conduct the task hassle-free.
Besides, it is simple to use and can calculate EMI for many purposes other than house loans. With so many utilities and benefits, you must consider a home loan EMI calculator for your calculation and evaluate finances seamlessly.