A home loan comes with a long-term commitment for repayment through EMIs, extending for up to 30 years. Such extended responsibility needs the borrower to be planned and strategic about repayment liabilities, EMIs payable, and total interest accumulated for timely loan repayment. It is thus always suggested to use available financial tools like a home loan EMI calculator in India when availing of a housing loan.
Accessing a home loan EMI calculator in India is not difficult as several financial institutions and intermediaries provide them for user convenience. Below given are a few crucial things you need to know about these calculators.
8 Important things to know about a home loan EMI calculator
1. Self-help financial tools for EMI computation
Home loan EMI calculator in India is designed as self-help tools that users can use for borrowing assessments without much hassle. These are easy to use and compute accurate results. You can use them to assess how much EMI you would need to pay based on the loan amount and tenor you seek to avail.
2. It works on a preset formula for the computation
It is preset with a simple formula used to make the calculations, which ensures computational accuracy and instant results. The formula used for EMI calculation goes as – P x R x (1+R)^N/[(1+R)^N – 1]. Herein, P stands for the principal amount, R goes for the rate of interest applicable, and N represents the tenor selected in months.
3. Only 3 entries are needed for computation
When using an EMI calculator before borrowing a home loan, you only need to make 3 simple entries. You need to enter the loan amount you seek to avail in the designated space for principal, input the tenor value in months, and the interest rate applicable to compute results.
4. Free usage of EMI calculators
Reputed financial institutions extending home loans in India provide these calculators for free hosted on their websites. Any user, whether a customer of the lender or not, can access these self-help tools for borrowing assessment.
5. Easy comparison of loan offers
Using any standard home loan calculator in India, you can compare different loan offers provided by several financial institutions. Make your comparisons based on the interest rate levied, the EMIs payable, and other repayment computations that the calculator makes.
Even with loan selection based on the amount and tenor entered, you can compare the results obtained from your home loan EMI calculator for the best affordability. You can do so by comparing the EMIs payable and interest accrued for selected combinations of loan amount and repayment tenor. Choose a loan amount that keeps the EMIs at the lowest while the tenor shouldn’t be too long as interest accrual based on the repayment duration can prove costly.
6. Computation of amortization schedule
Some of the sophisticated home loan EMI calculators in India also compute the amortization schedule. It helps with the assessment of principal and interest components for each EMI. Such clarity regarding your repayment liability should help you make timely repayment decisions, such as when you should prepay your home loan, or choose to refinance.
Such repayment decisions can help save significantly on your interest liability, especially with refinancing options like home loan balance transfer.
Some lenders providing these facilities also extend pre-approved offers to simplify the process of financing. These offers are available on a range of financial products, including housing loans and loans against property. You need to provide only your name and contact details to check your pre-approved offer.
7. EMI calculation based on a fixed-rate system
When using an EMI calculator, you must know that computation from these tools is based on the fixed system of interest rate levy. Conversely, you can choose between floating and fixed interest rates when availing of a home loan. If availing of the loan at a floating rate, you must thus keep a check on the EMIs, which can vary based on interest rate adjustments. Also, know that while the amount of EMI remains the same after adjustment, the total number of EMIs payable might increase or decrease to complete total home loan repayment.
8. Results obtained on computation
The EMIs you would pay for a selected combination of loan amount and tenor are not the only results the home loan calculator provides. Additionally, it also computes the total loan liability payable along with the total interest payable for the entire tenure. Further, some home loan calculators also depict the pie percentages of principal and interest components out of the total loan liability so the borrower gets a bigger picture of how many additional payments he/she would have to make as interest accrued.
Some of the best home loan EMI calculators in India combine these features to provide the most useful user experience and help with informed borrowing decisions. You can also look for similar tools like eligibility and balance transfer calculators to assess your loan-related decisions better.