Very few people can buy a house with their funds right away. Since a home is expensive, it can be difficult for individuals to accumulate funds. Due to a lack of funds, they decide to take a home loan. A housing loan can fund the purchase of a real estate property even during crunch financial situations.
The borrower would have to pay back the amount with interest to the lender in equated monthly instalments or EMIs.
So if you’re planning to apply for a home loan, it’s better to calculate your EMIs and set a monthly budget beforehand. An online home loan EMI calculator can help plan the EMIs for a housing loan.
Let us explore how a housing loan EMI calculator can help with planning.
Understanding the Concept of EMI Calculators
In this era of digitization, many financial institutions offer online tools to help customers check their eligibility, monthly EMIs, etc. Calculating the EMIs for a home loan physically can be challenging. For the same reason, online EMI calculators are popular.
Usually, financial institutions have an online EMI calculator on their websites to facilitate the customers. One can visit the financial institution’s website and plan for their housing loan. It usually happens before submitting the housing loan application.
The online EMI calculator helps identify the monthly EMI, interest rate, and other loan factors.
An online EMI calculator will require the following inputs to generate the expected EMI amount:
- Amount of loan
- Rate of interest
- Loan tenure
After entering all the inputs, the online EMI calculator will show the per month EMI, total payable interest, and total payment (interest charge + principal).
For example, if the loan amount is INR 20 lakh for ten years with an interest rate of 7.99%, the EMI for every month will be INR 24,255. At the end of the loan tenure, the total interest charges will amount to INR 9,10,594.
Why Should You Use an Online EMI Calculator?
Every financial institution is now acknowledging the usefulness of an EMI calculator for customers. For the same reason, they are now integrating an online EMI calculator on their websites. The three major benefits of using an online home loan EMI calculator are as follows:
It Aids in Choosing the Right Loan Provider
Home loan EMIs should be paid without any financial strain. For the same reason, choosing a loan provider with an affordable interest rate is critical. After feeding the interest rate of each lender into the EMI calculator, the overall cost of a housing loan is computed. It can help you choose the right loan provider with the best loan offer.
It Helps Choose the Appropriate Loan Tenure
The tenure of the loan depends on one’s financial capabilities. For example, someone with a high income will try to finish the loan as quickly as possible. Closing a loan quickly will help escape some of the interest charges.
However, not everyone is financially stable enough to repay loans quickly. For customers with a low salary, the loan tenure often augments. With an EMI calculator, customers can understand the loan tenure and choose what’s right for them.
It Helps Plan the Pre-Closure of the Loan
Sometimes, customers try to close the housing loan before the pre-decided tenure. After paying foreclosure charges, the housing loan is closed before the pre-decided term. With the home loan calculator, the pre-closure of a loan can be planned.
Online EMI calculators are simple to use and highly accessible. An EMI calculator lets you set the loan amount, tenure, and interest rate and then decide the best combination for you. Check an EMI calculator, plan your EMIs, and apply for a home loan that suits your needs and repayment capacity.