How can One Use the Home Loan Instalment Calculator?

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home loan installment calculator

Following the repo rate increase by 50 basis points, the interest rate applicable to home loans has increased notably. Potential home loan borrowers should opt for a loan at a suitable interest rate for hassle-free repayment.

In such a case, an online device like a home loan instalment calculator can be a great help. It is an easy-to-use online tool providing an estimate of monthly instalments.

Step-wise guidelines for using a home loan installment calculator

Home loans are a long-term commitment, and their affordability depends on various factors like loan amount, tenor, etc. In this regard, potential borrowers should access an online home loan calculator to check the monthly repayment to make an informed financial decision.

With this user friendly tool, and one can get the EMI amount and the other details in no time. Here is a step-wise guideline on to use this calculator:

  • Visit the preferred lender’s official website
  • Navigate to home loan instalment calculator
  • Enter the inputs such as housing loan interest rate, loan tenor, and principal amount
  • Get the instalment amount and the total interest payable instantly.

In addition, borrowers can easily alter the figures to find a home loan offer that fits their repayment capacity.

How does a home loan installment calculator work?

The home loan EMI calculator is designed to helps compute loan EMIs without any hassle. It mitigates risk related to an extensive manual estimation and offers results with utmost precision and accuracy. In addition,borrowers can save a lot of time without any room for inaccuracy. 

Online home loan instalment calculator uses the below-mentioned formula to calculate home loan EMI:

‘EMI = [P x R x (1+R) ^N] / [(1+R) ^N-1]’, in which P is the loan principle amount, R is rate of interest, and N is loan tenor in months.

Example

For a clear understanding of EMI calculation, let’s assume an example:

A home buyer planning for a housing credit of Rs.50 lakh for 20 years at a 7% interest rate. As per the estimated formula, the EMI will be:

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

         = [50,00,000 x 7% x (1+7%)^ 240] /[(1+7%) ^ 240- 1]

         = [50,00,000 x 0.0075 x (1+0.0075)^ 240] /[(1+0.0075) ^ 240- 1]=Rs.44,986

What are the advantages of using a home loan instalment calculator?

Here are some of the top reasons to use a home loan calculator:

Provides customisation option

It is one of the notable advantages of utilising a home loan calculator. Potential borrowers can make certain alterations accordingly to find a favourable combination of total principle or loan amount, tenor, and interest rate. It will help to make more well-informed decisions for choosing the appropriate loan offer.

Precise estimation

Another notable advantage of using a home loan instalment calculator is its accuracy over complex manual calculations. Manual calculations can be confusing and complex. In this regard, by simply entering a few values, this calculator provides instant and accurate results.

Better financial planning

Along with the benefits mentioned above, a home loan calculator provides access to loan repayment schedules. In addition, This schedule provides a detailed breakup of a housing loan EMI payment. Furthermore, it shows detailed instalment progress throughout the loan tenor helping potential buyers to plan their finances in advance.

Compare loan offers

The option to alter the inputs and make adjustments helps borrowers to compare different loan offers. Through this online calculator, borrowers can figure out easily compare among various home loan offers and choose one that is suitable for their finances.

In addition, Besides considering home loan interest rates and other features extended by the financial lender, one must also check the home loan fees and charges imposed on the amount. In addition, reputed lending institutions and NBFCs provide pre-approved offers. These offers are available for financial products like loan against property and others. Individuals can check their pre-approved offers by providing requisite details, such as their names and contact numbers. These offers can help streamline the loan application process.

In addition, a home loan calculator is a valuable tool that facilitates efficient financial management for borrowers. It also enables a borrower to identify a suitable loan offer.Â