You can always calculate your home loan EMIs manually, but there’s a chance you’ll make a mistake. The whole process will also be time-consuming and stressful. However, planning your loan repayment and finances will be easier than ever if you use a house loan EMI calculator. A home loan calculator is online tool that helps you the EMI amount that you will need to pay towards your home loan, thereby helping you make an informed decision. With the help of an online EMI calculator for home loan for a home loan, you can accurately find out the EMIs (principal amount + interest) you need to pay each month for home loan repayment.
With just one or two simple clicks, you can know everything there is to know about your home loan and its repayment. It’s that simple. So, before you start with your house loan application, take advantage of this fantastic online tool and get the rewards. In this article, we will tell you how a home loan calculator can make loan planning easy. But before anything, here’s a quick tutorial on how to use the EMI calculator for a home loan:
- Enter the principal you want to borrow.
- Enter the house loan’s applicable interest rate.
- Enter the number of years you will need to repay your home loan.
After you’ve completed the above procedure, the house loan calculator will give you your EMI, along with other information, such as the total amount owed and the total interest owed.
There are many benefits associated with using a home loan calculator, but the most simple reason is that home loan calculations are tricky and doing them manually can lead to many errors. Here is the formula used to calculate home loan EMIs:
e = [p x r x (1+r) ^n] / [(1+r) ^n-1]
here, e is the EMI amount, p is the principal, r is the interest rate, and n is the loan term.
so, if you are applying for a home loan of INR 10 Lakhs for a 5-year term at an interest rate of 10%, your EMI would be:
e = [10, 00,000 x 10 x (1+10) ^ 20] / [(1+10) ^ 20-1]
here, e amounts to INR 21,247.04 per month.
A home loan calculator makes these calculations simple. Let us now look at how a home loan calculator makes loan planning easier for you.
Reasons Why Home Loan Calculator Makes Loan Planning Easier for You
You Will Save Time on Difficult Calculations
Because you’re using the same technique and performing same calculations over and over again, evaluating loans offered by different lenders can quickly become tedious and time-consuming. If you decide to calculate loans and their corresponding EMIs manually, you will take a long time. However, by using this online tool, you can save valuable time by completing all of the lengthy and tedious calculations in a matter of seconds. As a result, you can experiment with as many different amounts, tenors, and interest rates as you wish from the comfort of your own home.
It Assists You in Determining How Much to Borrow
Using an EMI calculator, you can calculate an amount that fits into your monthly budget. You can make advantage of the free home loan calculator available online. To arrive at the most reasonable EMI, change the tenor and home loan interest rate parameters beside the loan amount. Modify the figures till you’re certain of the EMI you’ll be able to afford.
Assists with Financial Planning
When calculating the EMI for a loan, you need to know the amount you’ll have to pay if you take out a loan for a specified amount and for a specific term. This will assist you in arranging your money before taking out the loan, ensuring that your monthly budget is not burdened. You can also play with the loan’s parameters to get the best EMI for your needs.
You’ll Be Able to Handle Your Other Debts Better
Most people pay EMIs on many loans at the same time. If you’re one of them, you’re well aware that adding another debt to your existing ones will have an impact on your finances. The house loan EMI calculator allows you to include your other loans and assists you in determining the right tenor and principal while taking into account the other EMIs. Further, if you have the financial means to pay off your home loan (or other loans) before the end of the term, you can easily calculate the fees connected with foreclosure with a home loan calculator.
It Helps You Plan Your Home Loan Prepayment
With the help of the house loan EMI calculator, you have manage your EMI payments and determine the best time to pay off your loan. The term “prepayment” refers to paying off a debt before it is due to close. Prepayment also helps to reduce interest payments by reducing the period of the loan. As a result, you can carefully examine the calculator’s results to determine the amount of time it will take you to save enough to prepay. You can then set aside money on a regular basis to pay off your home loan. If you haven’t been able to save enough, you can prepay in part to save money on interest.
Thus, home loan planning is much easier when you use an online calculator to your benefit.
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