Home loans help you buy the house of your dreams without digging into your savings. However, these loan offerings are long-term commitments that can alter your finances significantly. Therefore, you must plan the loan repayment carefully. It would be best to know how much you need to pay every month for the loan. An EMI calculator can help you do so.
If you are planning to avail a home loan to buy your dream house, read on to know why you must use an EMI calculator before you proceed with the loan application.
What Is a Home Loan EMI calculator?
EMI calculator is a utility tool available online that you can use to check your EMI and total repayment amount. With an EMI calculator, you can check your home loan EMI amount for the entered loan amount and home loan interest rate. Home loan EMI calculators also tell you the total amount you would pay towards the loan and the interest component in it. The EMI calculator works on the following formula –
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
P – Principal. The desired loan amount.
R- Rate of interest in months
N- Loan tenure in months.
How Can You Benefit from Using an EMI Calculator?
A home loan EMI calculator offers the following advantages –
- It’s easy and convenient
An EMI calculator is easy and convenient to use. There are no complex procedures or multiple steps that you would need to remember. You simply have to enter the values and get the results instantly.
- It is accurate
There is no room for errors while using an EMI calculator, unlike manual calculations. The results you get are accurate and precise. With this accuracy, you can even cross-check the EMI value informed by the lender.
- It aids in financial planning
With the EMI calculator, you can find the precise amount of EMI and total repayment value. Accordingly, you can prepare your budget and manage your finances. It will also aid you in financial planning and managing your debt better.
- It assists in making better decisions
You can check lenders based on the calculated EMI and choose a housing loan that is suitable for you. You can also use the calculator multiple times to know the affordable loan tenure and EMI. With an EMI calculator, you can make informed decisions to repay your loan comfortably.
How to Use a Home Loan EMI Calculator?
- You can find an EMI calculator on any lender’s website.
- Input the interest rate, loan amount and tenure in the space provided
- Alternatively, use the slider to enter the values.
- The EMI value will be displayed instantly.
- You can make changes in the home loan tenure and loan amount to arrive at an affordable EMI.
A Home Loan EMI Calculator helps in decision making while availing a housing loan. It helps you plan your loan better and aids in determining your affordability. Before you apply for a home loan, ensure to use an EMI calculator to avail the most suitable plan.