Home Loan EMI Calculator
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Length
% Interest
Principal
Interest
Total Payable
How to Calculate Your Housing Loan EMI Online Using a Home Loan EMI Calculator?
Purchasing your dream home is a significant financial decision, and for most, it involves availing a home loan. A Home Loan EMI Calculator is a powerful tool that can help you in your home-buying journey. It allows you to estimate your Equated Monthly Installment (EMI) effortlessly, giving you valuable insights into your monthly financial commitment. In this post, we will explore the importance of a Home Loan EMI Calculator and how to use it effectively.
Understanding Home Loan EMIs
EMI is a fixed monthly payment that you make towards repaying your home loan. It comprises both the principal amount and the interest, spread out over the loan tenure. The EMI remains constant throughout the loan tenure, and the proportion of principal and interest in each EMI payment changes over time, with more going toward the principal as the loan progresses.
Benefits of a Home Loan EMI Calculator
- Low Complexity – Calculating EMI and its components can be challenging, especially for first-time borrowers. A Home Loan EMI calculator in India can swiftly perform complex calculations, saving you from manual labor.
- Accuracy and Time-Saving – Manual home loan EMI calculations are time-consuming and prone to inaccuracies, making the calculator a time-saver for prospective homebuyers. The calculator provides accurate estimates, essential for effective financial planning, eliminating the possibility of errors or ambiguity.
- Specific Calculations – EMI calculation methods vary for different loan types; for instance, home loan EMI calculation differs from personal loan EMI calculations. The Home Loan EMI Calculator is specific to home loans.
- Free To Use – The online calculator is freely accessible for unlimited use, allowing you to assess EMIs for various loan amounts, and aiding you in making informed financial decisions.
How to Calculate EMI on a Loan?
EMI Calculation Formula –
EMI = P x R x (1+R)^N / [(1+R)^N-1]
where-
P = Principal loan amount
N = Loan tenure in months
R = Monthly interest rate
The rate of interest (R) on your loan is calculated per month in the following way –
R = Annual Rate of interest/(12×100)
If the rate of interest is 6% p.a. then r = 6/12/100 = 0.005
EMI Calculation Example
If the annual rate of interest is 7.2%, the value of ‘R’ will be 7.2/(12×100) = 0.006
On availing of a home loan of Rs. 75 lakh at an annual interest of 7.2% for a tenure of 240 months (20 years), the EMI will be calculated as:
EMI = 75,00,000*0.006*(1+0.006)240/[(1+0.006)240-1] = Rs. 59,051
- The Total Payable Amount is Rs. 59,051 *240 months = Rs. 1,41,72,287
- The Principal Loan Amount is Rs. 75,00,000
The Interest to be paid is Rs. 66,72,287
Factors that Influence Your Home Loan EMI
- Principal Amount – The principal denotes the sum borrowed from the lender, and it has a direct correlation with your EMI. In other words, if your principal amount is lower, your monthly installments will also be lower, and vice versa. You can employ a home loan eligibility calculator to determine the eligible principal amount.
- Rate of Interest – The home loan interest rate signifies the rate at which the lender provides you with the home loan, and it is directly linked to the value of your home loan EMI.
- Tenure – Tenure plays a vital role in your home loan EMI calculation, representing the time frame for repaying your home loan. It exhibits an inverse relationship with your loan EMIs; meaning, the longer the tenure, the smaller your EMI. However, it’s crucial to note that an extended tenure results in a higher total interest payment.
Using the Home Loan EMI Calculator
Using a Home Loan EMI Calculator is simple and can be done in a few easy steps:
- Input Loan Details: Enter the loan amount you require, the interest rate offered by the lender, and the loan tenure.
- Calculate EMI: Click the calculate button, and the EMI calculator will provide you with the exact EMI amount you would need to pay each month.
- View Amortization Schedule: A good EMI calculator will also generate an amortization schedule, which is a detailed breakdown of each EMI, showing the principal and interest components and the outstanding loan balance after each payment.
- Analyze Results: Review the EMI, and the amortization schedule to understand how the loan will progress over time.
A Home Loan EMI Calculator is an indispensable tool for anyone considering a housing loan. It empowers you to make informed decisions, ensures you choose a loan that fits your budget, and helps you plan your finances effectively. Whether you are a first-time homebuyer or looking to refinance an existing loan, using an EMI calculator is a wise step in your home-buying journey. So, before you make that significant investment in your dream home, make sure to leverage the power of a Home Loan EMI Calculator to ease your financial planning and secure your future.