A home loan is one of the most popular and sought-after loan products available today. Owning a home is a smart idea ? not only does a home bring peace your mind, but it also increases your financial security. Home loan options are offered by banks to help you become a homeowner in the easiest way possible.
A home loan is typically a large sum of money borrowed from a bank and repaid over a long period of time alongside an interest. Since home loans a big- ticket loans, one must plan their home loan repayment schedule well in advance and very carefully too. In this regard, a well-designed EMI calculator is a crucial tool that will clear up all of your worries.
What Is an EMI Calculator and How Do I Use It?
A home loan EMI calculator helps prospective home loan borrowers figure out how much their monthly EMI will be. This interactive calculator also shows how much the borrower will have to pay toward debt repayment and how much they will have to pay toward interest payments. You must enter the following three values into a home loan calculator to get instant results:
- Principal amount
- Interest rate offered
- Tenor of the loan
Benefits of Using a Home Loan EMI Calculator
1. It Helps Save Time
One of the main advantages of the EMI calculator is that it saves you time by providing precise and quick results. A home loan EMI calculator is available online, saving you the time and effort of going to the bank, standing in lines, and waiting for your EMI to be computed by a bank professional. Furthermore, the burden of submitting a slew of complicated documents or calling a customer service representative to compute the home loan amount and interest rates is eliminated. You may use a home loan EMI calculator while on the road, at a work break, or even on vacation at the other end of the world because it is available online. All you need is a good internet connection.
2. It Helps You Make Better Decisions
By allowing you to experiment with the elements that determine your EMI, an EMI calculator allows you to make an informed conclusion.
The amount of your loan, its term, and the monthly interest rate all play a factor in the size of your EMI. Why? Because your EMI is directly proportional to the principal amount borrowed: the bigger the loan amount, the higher the EMI you’ll have to pay. Furthermore, a longer loan term will allow you to lower your monthly installments, whilst a shorter one would increase your EMI. A higher interest rate, of course, means a higher EMI.
3. It Can Be Trusted For Accuracy
The precision of the results is one of the best features of utilising the EMI calculator. When calculating the amount of interest due manually, there is always the risk of making a mistake. The housing loan EMI calculator conducts complex calculations in a matter of seconds, saving you time that you would otherwise have to spend manually performing some quite difficult calculations to determine your EMI. Plus, you can rest assured that the calculator will deliver accurate results every single time.
You don’t have to use pen and paper and risk miscalculating the amount of interest due. You also don’t have to sit and experiment with different interest-rate combinations, desired loan rates, and loan tenors on your own. Furthermore, the algorithm allows you to experiment with different loan amounts and adjust the elements determining your EMI without harming your credit score.
4. It Simplifies the Loan Planning Process
Home loan EMI calculators are meant to help you figure out how much interest and principal you’ll have to pay over the life of your loan. House loan EMI calculators have been the go-to method of calculating EMIs due to their ease of use. Furthermore, a home loan calculator doesn’t only tell you how much EMI you’ll have to pay, but it also provides you with an amortisation schedule/table for the life of the home loan. An amortisation schedule may sound complicated, but it simply refers to a table or schedule that shows a breakdown of the loan amount you must repay over time.
In short, due to the reasons explained above, it is always advised for home buyers to figure out their EMI schedule using home loan EMI calculators online for best decision making before taking a home loan.
The amortisation table indicates how much of the principal and interest will be paid each month until the loan is paid off in its entirety. During the loan term, the amounts in the amortisation schedule are equal. Having access to this table can assist you in planning out your loan installments in advance and avoiding default. Further, the calculator also assists you in assessing your lifestyle and financial demands, as well as determining how you will pay back the loan using the allotted EMIs. Paying back a loan on a monthly basis can be challenging if you don’t plan ahead and prepare.