Home loan calculator
Best home loan calculator online
Estimates your monthly mortgage payment
Rate of Interest per annum( PA)
*This amount is calculated on 6% p.a. for the span of 5 yrs.
Overview of home loan emi calculator
A home loan EMI calculator is an online financial tool available on various financial websites to help individuals calculate the estimated amount of monthly repayment they will need to make towards their home loan. It provides a detailed breakdown of the amount of EMI, including principal as well as interest component. This breakdown helps individuals with insights into the amount they need to contribute every month to repay the principal borrowed amount and the interest due on it. The calculator holds major significance in the concept of financial planning. Additionally, it encourages borrowers to make well-informed decisions as per their financial threshold and goals.
Purpose of home loan emi calculator
A home loan EMI calculator is a valuable tool for individuals in navigating the complexities of understanding and managing a home loan. There are several key purposes of the calculator, some of which are mentioned further:
- Estimation of monthly repayment: A home loan EMI calculator provides individuals with an instant and precise estimate of the monthly repayment obligations of their home loan. It allows them to foresee and plan accordingly for their financial commitments in the future, thus enhancing financial awareness and ensuring a smoother repayment process.
- Financial literacy: The EMI calculator for home loan helps borrowers understand the components of the calculator which enhances financial literacy and allows individuals to make informed decisions and foster a clear comprehension of the concepts associated with their home loan.
- Facilitates decision-making: The calculator helps borrowers in making well-informed decisions by providing insights into the monthly payments and the overall cost of the loan. With all the information being transparent and comprehensible, borrowers can make decisions that suit their immediate needs as well as their long-term financial threshold.
- Mitigation of risk: The home loan EMI calculator assists in the mitigation of risk by providing insights into the financial implications of their home loan obligations. This approach helps borrowers navigate potential financial risks in the future.
- Comparing various loan scenarios: The calculator facilitates comparison of various loan scenarios by helping users assess the impact of different factors like loan amount, interest rate, and tenure of loan. The advantage of comparing various scenarios enables a more strategic approach to selecting a home loan that is aligned with their individual goals.
How is emi calculated?
The Equated Monthly Instalment (EMI) is calculated using a mathematical formula that takes into consideration the principal loan amount, the rate of interest, and the tenure of the loan. The formula used for this calculation is mentioned below:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
In the formula,
EMI refers to an Equated Monthly Instalment
P refers to the principal loan amount
R refers to the rate of interest rate (per month)
N refers to the number of monthly instalments/ tenure of loan (in months)
Using the home loan emi calculator
Now that we are aware of the various advantages of a home loan EMI calculator, heres a step-by-step guide for you to make use of it:
- Step 1: Open the home loan EMI calculator
The first step is to open a home loan EMI calculator on your mobile or laptop.
- Step 2: Input the loan amount
The next step is to input the principal loan amount that you are planning to borrow for financing your house.
- Step 3: Enter the interest rate
Input the annual interest rate provided by the lender or the bank.
- Step 4: Enter the loan tenure
Specify the number of years you intend to take to repay the home loan obligation.
- Step 5: Click on ‘calculate/proceed’
After entering all the required details, click on ‘Calculate/Proceed’ to initiate the calculations.
Once you have followed the steps mentioned above, you can easily calculate the EMI on your home loan.
Loan Repayment Tips
Below mentioned are a few pieces of advice on loan prepayment options:
- Understanding the terms in prepayment: It is imperative to understand prepayment terms as they can significantly impact the financial implications of an early repayment of a home loan. Being thoroughly well-versed with these terms, borrowers can make informed decisions regarding a strategic approach to managing the home loan.
- Evaluating financial situation: The evaluation of an individual’s current financial situation is crucial in determining the viability of loan prepayment. While reducing debt is beneficial, it is equally important to maintain a buffer in the case of any unforeseen circumstances.
- Regular partial payments: Incorporating regular and smaller prepayments can gradually reduce the outstanding loan balance, further reducing the interest accrued.
- Checking for prepayment penalties: Prepayment penalties or additional charges must be checked before making early loan repayments. Borrowers must carefully assess and analyse the overall financial benefit before deciding whether to make prepayments or not.
- Tax implications: Understanding the tax implications of a loan prepayment is important to make informed decisions. In some cases, the interest paid on loans is eligible for tax deductions. However, making loan prepayments may impact these deductions.
In conclusion, a home loan EMI calculator serves as a valuable tool for individuals in simplifying the complex calculations of monthly payments, thus promoting financial awareness and informed decision-making. Its versatile functionality allows users to analyse various scenarios to ensure that the terms of their home loan align with their financial threshold and long-term goals. Thus, it proves to be an integral part of guiding borrowers through their home loan journey.
What factors affect home loan EMI?
Can the EMI amount change over time?
How to choose the right loan tenure?
What are the tax benefits of home loan EMIs?