When you are in need of funds and are considering taking a loan against your property, using a loan against property calculator can be helpful. This calculator uses information such as your property’s value, the amount of funds you need, the loan against property interest rate and tenure, etc., to give you your Equated Monthly Instalments (EMI) amount. While this is only an approximation, it is still useful in giving you an idea of what taking on this loan will look like for you. Here are three ways in which a loan against property calculator can particularly help you before you mortgage your property:
- Compare different loan options
A loan against property EMI calculator helps you quickly compare the available loan options and narrow down your best choices. This works in two ways. First, you can compare the different types of loans that you can avail, such as a personal loan and a loan against property. You will find that the loan against property interest rate is typically a lot lower than personal loans. This is because, in the case of a loan against property, it is a secured loan where your property works as a collateral. Second, you can compare the interest rates and terms offered by different lenders for loans against property by using the loan against property calculator.
- Analyse the interest and tenure relationship
When you use a loan against property EMI calculator, you can understand the relationship between your loan tenure and your interest burden. While the interest rate remains the same, the interest burden surges with an increase in the loan tenure. You can clearly see this when using a loan against property calculator. For instance, if you take a loan of Rs 50 lakh at a loan against property interest rate of 9.5%, the interest payable for a loan tenure of 10 years would be around Rs 27.63 lakh. But the interest payable for 13 years would be around Rs 37.24 lakh. As you can see, just an increase in the tenure of three years increases the interest payable by almost Rs 10 lakh.
- Begin budgeting and planning
When you use a loan against property calculator, you get a fair idea of what your EMI obligation will be. This allows you to re-work your budget and come up with a plan to repay your loan against property over its tenure in a seamless way. Hence, a loan against property EMI calculator can allow you to have a clear repayment financial plan in place and take on this debt confidently.
Essentially, a loan against property EMI calculator is a starting point in understanding and narrowing down on a loan when mortgaging your property. It helps you analyse how much your interest expense will be and what your ideal loan tenure looks like. It will also allow you to compare different loan options and choose the one that best suits your needs.