Here’s How A Home Loan EMI Calculator Helps Borrowers Plan Their Finances Better

A home loan is a significant and long-term liability. So, making an informed decision is paramount to staying debt-free forever. To make home loan calculation more convenient, lenders provide several free tools.

A home loan EMI calculator is a free tool Indian lenders provide to customers for error-free EMI calculation. You can use the calculator as many times as you want to check the real cost of home loans. 

Explore the following sections to understand the home loan EMI calculator in detail, including its purpose, benefits, and the best way to use it.

What is a Home Loan EMI Calculator? 

A home loan EMI calculator is an easy-to-use tool to calculate the actual cost of a home loan. It gives you a near accurate estimate of how much you have to shell out to fulfill your life’s most cherished dream – to construct or purchase a house.

To use an EMI calculator efficiently, you need to know three figures – the principal (read, loan amount), interest rate, and loan duration. 

The loan principal is related to the house purchase or construction value. However, factor in the minimum down payment amount, 10%, while deciding the loan amount. If your house value and the loan value are INR 50 lakh, you will need to make a downpayment of INR 5 lakh; so the actual loan amount will be INR 45 lakh.

When it comes to interest rate, the actual value depends on multiple factors, including your net income, property value, property location, existing debt, loan amount, tenure, and the like. 

The third and last figure you need to enter on the EMI calculator is the tenor/ term or duration by which you will repay the loan principal and interest. The maximum loan term can be thirty (30) years from the first EMI payment date. 

Home Loan EMI Calculator – Benefits of Using It

The home loan EMI calculator is a feature-rich tool provided by lenders for convenient EMI calculation. Here are the five major benefits of using an EMI calculator:

Accurate

A home loan EMI calculator displays accurate results without any errors. In contrast, you might make mistakes when you calculate the EMI manually. 

Hence, using an online EMI calculator is beneficial when you need accurate results.

Quick

If you calculate the home loan EMI manually, you may waste much time. However, the EMI calculator provides accurate figures within seconds. 

You can use the time thus saved on other meaningful activities.

Must Read: Everything You Need To Know About Processing Fees For Home Loan

Plan Better

An EMI calculator might help you better plan your liabilities and finances. You can change the figures as many times as you want to arrive at an affordable EMI amount. 

It may also give you an idea of whether you should opt for home loan insurance or not.

Compare Loans

Perhaps the best feature of an EMI calculator is that you can use it to compare multiple lenders. All you need to do is open an EMI calculator and collect the interest rates offered by various lenders. While keeping the loan amount and tenure intact, change the interest rate to see the difference in your monthly liability.

No Personal Information Required

You can use a home loan EMI calculator without sharing your personal details. Most Indian lenders offer uninterrupted access to the EMI calculator. So, you do not have to think about the security of the personal details you shared. 

Wrapping Up

A home loan EMI calculator offers unmatched convenience and simplifies loan applications. 

However, it is wise to consult a lender to know the interest rate. 

The interest rate is borrower-specific and depends on income, property status, existing debt, etc. So, the interest rate displayed on the lender’s website might be indicative and not final. And since the interest rate is a vital figure for home loan EMI calculation, knowing the actual rate is crucial to getting the right estimate.