Home Loan Installment Calculator - Know the Uses and Benefits

When one applies for a Home Loan, one should at first think about his repayment capacity. If the applicant does not meet the eligibility or, his income is insufficient to cover the EMIs of the loan amount he is thinking about applying for, then his loan application would be rejected. This requires a sufficient amount of financial planning and a Housing Loan EMI calculator can be used for the purpose of planning ahead. This is important so that one suddenly does not find himself to be in financial crises, unable to pay off the loans, and risk the loan becoming a liability instead.

Benefits of Using a Home Loan EMI Calculator:

- A Home Loan installment calculator is an easy- to – use, free, online tool that can help in the calculation of EMIs. Almost all leading banks and NBFCs like Bajaj Finserv have both EMI calculators and housing loan eligibility calculators in their website so that the borrowers can instantly calculate their EMIs. These calculators produce instant results and their algorithm does the complex calculations in seconds which will instantly calculate the exact EMI the lender is supposed to make.

- Using an EMI calculator requires no prior training and anyone can use it. One simply has to provide all the details in the required fields regarding the expected amount of loan, the loan tenure, the Home Loan interest and additional information like other sources of income. The calculator will take all these factors into account and calculate the EMI. The entire process often takes less than 2 mins and this tool is especially handy if one needs a loan on a short notice and wants to calculate their EMIs instantly.

- One could try out various combinations by adjusting the sliders of the calculator. The Home Loan amount, loan tenure and income can be varied to reach an EMI amount which the applicant would be able to comfortably pay off. Moreover, this online tool is available free of cost, round the clock, so anyone, anytime might use it. All one has to do is look for the EMI calculator from the Home Page and after the calculation is complete, one can move on to the loan application page instantly. In the final stages of verification, some documents required for Home Loan has to be produced like KYC documents, pay slips, and IT returns, and one is good to go.

How does an EMI Calculator Work?

Certain inputs have to be provided for the calculator to work properly. First, is the loan amount. The loan amount cannot be more than 20% of the cost of the home, which means that the rest of the 20% has to be paid by the buyer. Next, is the interest that is going to be levied by the bank or the NBFC on your Home Loan. The interest can be either a fixed or a floating interest rate. Moreover, certain calculators are also designed to take care of the inflation rates in future. Third, the calculator will factor in the tenure of the Home Loan, which in most cases is 20 years, but certain bank or NBFC might raise it to twenty- five or thirty years. Certain websites have both Home Loan interest calculator as well as Home Loan EMI calculator for better comparisons.

The interest rate that banks and NBFCs charge on the loan is mostly an annual one and so to calculate the EMI, this rate has to be converted to a monthly rate, which the calculators do with ease. The entire point of these calculators is to reduce the financial hassle of opting for a loan and thousands of applicants are benefited by it each year.

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