Major Benefits of a Loan EMI Calculator

Loans have become an essential part of almost all our lives. From fulfilling long-term dreams like purchasing a house, a car, or managing wedding expenses, overseas education, most individuals usually cannot do without availing of a loan. When talking about loans, the term ‘EMI’, which stands for equated monthly instalments, comes to mind. 

An EMI is the monthly amount payment made toward a loan opted for. An EMI calculator such as a home loan EMI calculator is a widely available, easy-to-access online tool that enables a borrower to calculate the amount they need to repay toward the loan. The EMI calculator factors in a few important aspects, including the home loan amount, tenor, and home loan interest rate. A home loan EMI is an amount that is payable by a borrower every month to the lender to satisfy the home loan principal and accumulated interest.

What is a Home Loan EMI Calculator?

The home loan EMI calculator is an easy-to-use tool that aids in the calculation of a home loan instalment or the EMI toward the availed home loan. It is an intuitive financial planning tool that comes in handy throughout the loan application process.  

Calculating Home Loan EMI 

The formula used to calculate home loan EMI is given below.

EMI Amount = [P x R x (1+R) ^N]/[(1+R) ^N-1]

  • P – the amount lent by the borrower from a financial institution
  • R – the home loan interest rate which is set by the financial institution 
  • N – the home loan period

The principal, current home loan interest rate, and time are variables, which implies that the EMI value will change when any of these are changed.

How to Use a Home Loan EMI Calculator?

The borrower should enter the three inputs (loan amount, rate of interest & loan tenor) in the respective slots in a home loan EMI calculator, and the tool will accordingly reflect the EMI home loan amount. As the type of calculator varies from one financial institution to another, the borrower can adjust the figures of the calculator with the help of sliders. 

Moreover, if the borrower wants to customize and plan the home loan based upon his comfort, they can change the figures accordingly. The home loan EMI calculator will provide an instant calculation with complete accuracy. 

Major Benefits of Using an Online Home Loan EMI Calculator

To avail of a housing loan in India, one needs knowledge of how to calculate home loan EMI. It can be easily done using the online EMI calculator & using the tool one can also get home loan tax benefits. A user can customize their home loan if a lender allows by using different figures and data to compare which one is the most suitable. The customer understands how to reduce home loan EMI.

  1. Aids in fast and accurate calculations: The online home loan EMI calculator can generate results in just a few seconds with accuracy. In the case of manual calculations, there are always chances of errors.
  2. Helps in pre-planning: Online EMI calculator helps to make calculated decisions to avail a housing loan. When one has calculated the EMI outgo beforehand, they can adjust their finances accordingly. They are unlikely to encounter unforeseen troubles in the future.

 

  • Ensures anonymity and privacy: The online home loan EMI calculator is convenient to use and needs to insert some basic inputs, including the principal amount, number of years for which the loan is being availed of, and the rate of interest and the expected EMI outgo shows up automatically. The user can keep adjusting the inputs to compare home loans with different home loan interest rates, tenors, and principal. There are no limitations to using this unique home loan EMI calculator. As the calculation gets done in a matter of some clicks. Since a user does not have to disclose personal information, the borrower’s identity is never revealed.

 

  • Helps secure maximum savings: A home loan borrower can move an outstanding home loan balance to another lender, pay lower EMIs and enjoy the savings for other important things in their lives with the help of a home loan balance transfer. But before taking the leap, they must consider the associated charges, if any. This is where an online home loan EMI calculator helps. It can consider all charges, the outstanding balance, tenor, and rate of interest and show a borrower how much they can still save up.

 

  • Assists in planning home loan repayment: Once a borrower knows how much they can afford to borrow based on current home loan interest rates, they can adjust the tenor and arrive at the home loan EMI they are comfortable paying. This also helps plan home loan repayment better. 

 

The Final Word

Using a loan-specific EMI calculator is easier and makes the calculation smoother. In other words, a user can use a different calculator for each type of loan — be it for education, a new home, or a car. The parameters for loans may be the same, but there can be instances where the borrower will need to utilize a loan-specific EMI calculator.

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