Housing finance companies have seen a 75% rise in home loan disbursements due to the affordable interest rate and attractive offers. These financial institutions offer multiple benefits like easy repayment tenor and substantial funds to borrowers interested in purchasing a house.
A home loan calculator is one of the additional benefits offered by lenders to attract more applicants. This tool provides an exact calculation of the monthly outgo a housing loan borrower needs to make.
This calculator may vary in looks and interface. However, the parameters like interest rate, loan amount, tenor remain the same. In this regard, one can even find a home loan EMI calculator with prepayment calculation option.
With this free tool, a borrower can determine their repayment capability and plan their finances accordingly.
How is home loan EMI calculated?
To understand the features of a home loan EMI calculator, one needs to understand the equation first. Usually, lenders follow a mathematical formula to calculate the home loan EMI.
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
In this formula, P represents principal loan amount, N stands for the number of monthly instalments, and R represents interest rate. Following this formula aids a borrower to determine the exact EMI outgo without hassle.
However, calculating the EMI manually can lead to multiple errors and trials. Moreover, following such results without checking its accuracy can compromise the repayment or prepayment of home loans.
This issue can be mitigated by using a free home loan repayment calculator available online. Individuals need to visit a preferred lender’s site and enter their credit details to figure out the EMI. Additionally, one can also find a detailed break-up of the total credit.
They have to enter the number of instalments, required loan amount and interest rate in the respective online home loan calculator spaces. This again helps them to know how much home loan EMI one can afford without affecting the disposable income.
Features of a home loan repayment calculator
Some of the benefits offered by a home loan calculator are discussed below.
- Accurate calculations
Home loan pre payment calculators are perfect for first time housing credit applicants. Since the application is quite convenient and straightforward, potential borrowers can use it conveniently. Moreover, they can determine the EMI outgo within seconds before making an application. This is a smart way to find a suitable lender offering a compatible interest rate as well.
One can also find HFCs that provide pre-approved offers on their selected products. Ideally, this offer is levied on products like loan against property, home loan, etc. This makes the loan application process swift and hassle-free. Check your pre-approved offer by entering a name and contact number in the given spaces.
- Comprehensive analysis
These calculators are swift in processing and useful in terms of accurate calculation. Moreover, one can find a detailed analysis of the instalments needed to repay. A potential borrower needs to change the metrics like tenor, interest rate, and loan amount to estimate total debt and EMI.
- Comparative breakdown
Home loan EMI calculator also helps a borrower compare financial institutions and their offers to find a suitable one. By utilising this tool wisely, individuals can calculate the actual savings they can make by opting for a particular lender.
A home loan calculator is a handy tool that can be accessed even via smartphones. Perfect for EMI calculation, this tool offers multiple benefits to housing loan borrowers. However, one must understand the variables linked with it to make an informed decision on the lending institution.