10 Things You Should Know About Home Loan EMI Calculator
Planning to avail of a home loan to fulfil your dream of owning a home. A home loan is a long term financial commitment that involves borrowing a huge sum. You should be able to understand your affordability before you venture into such a huge commitment that could go on for years.
You will need to factor in the existing financial obligations like monthly utility bills, credit card dues, EMIs of existing loans and arrive at the disposable amount for servicing the proposed home loan EMI. Once you have decided on the funds available for the downpayment, you can proceed to look for the best deal available in the market in terms of interest and other charges.
To manually comprehend the formula for arriving at the EMI with a given loan amount, tenure and interest are next to impossible. Even if done, the accuracy cannot be guaranteed. To make the calculation simple, you can make use of the Online Home Loan EMI Calculators. EMI calculator, an online tool, is available on the official websites of financial institutions. You can arrive at the EMI with just three components, i.e., loan amount, tenure, and interest rate.
Before using the Home Loan EMI Calculator, you need to know 10 important things about the EMI calculator:
#1. The Home Loan EMI calculator is an online financial tool that works on a mathematical algorithm to provide you with the EMI for a given loan tenure, loan amount and interest rate.
#2. The home loan eligibility, the EMI, and the funding available for the property’s market value will be calculated by the home loan calculator.
#3. The Home Loan EMI calculator does the calculation based on the formula
E=P * r * (1+r)^n / ((1+r)^n-1). Here E is the EMI, P is the principal, R is the rate of interest and N is the tenure.
#4. The input required to arrive at the EMI is the loan amount, tenure and interest rate. No personal and professional details will be required.
#5. The personal and professional details will be derived from the loan agreement.
#6. A state-of-art EMI calculator will take into consideration the EMI on the existing loans, State Taxes as well as insurance.
#7. The website of every financial institution will provide an EMI calculator that helps you make informed decisions. For instance, if you are planning to avail of an SBI Home Loan of Rs. 30.00 lakhs at 6.95% interest for a period of 30 years, then the EMI arrived at using SBI Home Loan EMI Calculator will be Rs..19858/-. The total interest outgo also will be calculated, and the total amount that will be paid by the end of the tenure also will be provided. You can do permutation and combination and choose the one that is affordable.
#8. A Home Loan EMI Calculator will also provide an amortisation schedule with a break up of the interest and principal amount for the entire tenure. With the amortisation schedule, you will be able to decide the stage at which you should be making pre-payments to save up on the interest cost.
#9. The EMI calculated on the Home Loan EMI calculator will be based on the fixed rate. For a floating rate, the EMI will vary every time the interest changes.
#10. With a Home Loan EMI calculator, you will be able to choose the best deal.
After a thorough online shopping, if you have decided to avail of SBI Home Loan, you can once again check on the eligibility using the SBI Home Loan Calculator.
Before arriving at the EMI using SBI Home Loan EMI Calculator, contact the nearest SBI branch and get the details of the current SBI Home Loan Interest Rates.
How to use the Home Loan EMI Calculator?
To use the I Home Loan EMI calculator, you should follow some simple steps.
- Access the official website of the financial institution
- Click on the Loans option.
- Choose Home Loans under Loans
- Select Calculator
- The Home Loan EMI calculator page will open
- Provide required input, i.e., Loan Amount, Rate of Interest and Tenure.
- Detailed calculation of the EMI, total interest paid for the loan term and the total payments made over the loan term will be displayed.
Need to calculate the EMI in Advance
It is the normal tendency to budget any purchase, be it a gadget for the home or a car. The purchase of a home is one of the biggest financial investments that you will be making, and it requires all the more budgeting. Funding this big purchase out of own funds is not everybody’s piece of cake. Most of us look for a home loan to either purchase or construct a house.
Being informed about the affordability and eligibility is very essential before the leap for a home loan is made. It is at this stage that the EMI calculation becomes essential. Calculation of the EMI will help you in deciding the following.
- It lends you a fair idea as to the amount you can borrow. If you have considered all the existing obligations that have to be provided from your income and are aware of the disposable income available to service the proposed loan, it will be easier to calculate the eligibility. The loan amount will be in proportion to the affordable EMI.
- It will give you an idea of tenure to be chosen, whether it should be a long term or a short term.
- Will know what your contribution should be towards the margin, i.e., down payment.
- It will enable you to draw a plan for servicing the long-term EMI promptly.
Applying for a home loan is not as easy as it appears to be. If you want the whole process to be seamless and culminate in a favourable direction, it is better to understand your eligibility and seek the right amount.