Home Loan EMI Calculator
Calculate your Home Loan amount and EMI using this calculator
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What Is Home Loan EMI?
The EMI amount you pay to the lender includes both the principal amount and the interest. During the initial few years of the loan tenure, a major chunk of the EMI goes towards the repayment of the interest amount. As you continue to pay the EMI, during the later years, a higher portion of the EMI is used to repay the principal amount.
The lenders usually decide the EMI based on several factors, including the amount you borrow, credit score, age at the time of applying for the loan, loan tenure, etc.
What Is a Home Loan EMI Calculator?
This is where the EMI calculator plays an important role. With this online tool, you can know the exact EMI payable based on the input you provide, including interest rate, the amount applied, and the duration. You can change the data multiple times and know the maximum EMI you can afford to repay. This helps you to apply for an affordable loan.
Apart from helping you know the EMI payable, the EMI calculator also helps you know the exact payment schedule and the total payment break-up.
How Does the Home Loan EMI Calculator Work?
Most home loan EMI calculators work on the following mathematical formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
In the above formula, P, R, N are variables, which means you can change the value of these components, and the EMI amount will vary based on the value of the variables.
- P stands for the principal amount (the actual loan amount you apply for)
- R stands for the interest rate.
- N stands for the loan tenure. For EMI calculation purposes, it is better to enter tenure in months.
Let us under the above formula with an example:
Assuming that you apply for an Rs. 30 lakhs at 9% interest rate per annum for 15 years, then as per the formula,
EMI = [300000*.75 /100*(1+.75 /100) ^180] / [(1+.75 /100)^180-1] = Rs 30,428
You can calculate the EMI manually or through MS Excel, but if you have no experience with the calculation, the process may seem overwhelming and time-consuming. To avoid such hassles, it is better to use the EMI calculator and get faster and accurate results.
What Are the Benefits of Using a Home Loan EMI Calculator?
- First and foremost, using the home loan EMI calculator is easy. Anyone can use it, and there is no need to have any technical expertise. You must only enter the inputs in the calculator, and the tool will automatically do the complex calculations.
- Even though you pay the home loan EMI consistently, you may not know the exact break-up of the amount. This tool gives you an accurate breakdown of the EMI, including interest payable, and the processing fee. Since most lenders tend to present the various costs as part of the loan amount, knowing the exact value can help you understand the actual loan cost.
- Another significant benefit of the home loan EMI calculator is that it allows you to compare the offers from different lenders. You can know actual loan costs and the respective EMI, which can help you find the right lender that offers the loan at a competitive rate.
- When you apply for a home loan, choosing the right tenure is critical as it has a direct impact on the EMI and the affordability. If you can afford to pay a higher EMI, you can choose a loan for a shorter duration and pay off the loan faster. If you are looking to reduce your monthly EMI payment, you can apply for a longer period.
- When you negotiate a home loan offer with the lender, you must verify the repayment schedule using the EMI calculator. Remember, sometimes, there may be a difference in the numbers. This happens because the lenders include various charges, apart from the interest in their EMI calculations.
- During the loan tenure, if you get any additional funds to make prepayments, you must calculate how repaying the part of the loan can help you close the loan account before the actual tenure. The EMI calculator can help you do the calculations.
- Since the home loan EMI calculator is an online tool, you can use it for free. You can use the tool any number of times without incurring any cost. Also, the tool is available 24x7, and you can use it to calculate your EMI as per your convenience.
What Is Home Loan Amortization Schedule?
You can use the EMI calculator to get a clear understanding of the ratio of the principal amount to interest. The tool also provides an amortization table explaining the repayment schedule; it gives you a complete break-up of the interest and the principal amount.
Home Loan EMI Calculator FAQs (Frequently Asked Questions)
How Do I Apply for a Home Loan?
To apply for a home loan, visit the page of your loan provider. Fill the online application form and the representative will contact you within the stipulated time.
What is an E-Home Loan?
An E-Home Loan is an online home loan that can be borrowed to purchase a house. It enables a borrower to complete the entire home loan application process online.
What is Home Loan EMI?
A home loan EMI is a monthly payment that a borrower makes in order to repay the home loan amount. An EMI stands for Equated Monthly Instalment. The principal amount, along with interest, is paid to the bank via EMIs.
What is the Benefit of Calculating EMI?
An EMI is a fixed amount that a borrower must pay every month in order to repay the loan amount. Therefore, by calculating EMI, an individual can find out loan affordability, decide the loan amount, and plan the monthly budget.
When Does My Home Loan EMIs Start?
EMIs start just after the month in which loan disbursement was made.
How do Part-Prepayments Impact Your EMIs?
Part-prepayment lowers the outstanding loan amount. Thus, it reduces the interest amount due. Therefore, the contribution of EMI for principal repayment increases. Hence, part-prepayment helps in repaying the loan faster.
How Does Home Loan EMI Payment Reduce Tax Obligation?
Under the Income Tax laws, a home loan borrower can claim tax deductions on the principal and interest payments made to repay the loan amount.
DisclaimerThe information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.