What are the advantages of using the EMI calculator for a home loan?
Owning a home provides somewhat indescribable mental satisfaction and security. One of the main ways to buy a home is to take out a home loan. A home loan is easy to get if you have an impressive credit history. However, for a home loan to work well without hassle, you will need an Equated Monthly Instalment (EMI) home loan calculator. It is a great tool that helps you calculate and manage your finances when applying for a home loan.
In this article, you will learn what a home loan EMI calculator is, the benefits of using a home loan calculator, how to use a home loan EMI calculator, and how to calculate the amount of a home loan using an EMI calculator. Keep reading.
What is a home loan IME?
A home loan IME calculator is a financial tool that allows you to estimate the EMI amount you need to pay monthly for your home loan. This tool also tells you about the estimated interest you will end up paying for the entire term of the mortgage. By following a few simple steps, you will be able to calculate the EMI home loan including interest at the applicable rate.
What is a home loan IME?
EMI stands for Equated Monthly Payment. The IME is the monthly payment that a mortgage borrower agrees to pay throughout the term of the mortgage. The EMI is a total of the fraction of the principal amount payable and the interest payable for a month.
What is a mortgage amortization schedule?
A home loan amortization schedule is a record / table that details all of your mortgage loan installments. This is generated by a depreciation calculator. Amortization refers to the process of repaying a loan in regular installments over a period of time. It estimates the loan payment along with the principal amount and the interest rate on each payment until the loan is paid off in full.
Benefits of using an EMI calculator for a home loan
A home loan EMI calculator offers you many advantages. Here are some of the benefits that will interest you.
1. Precise result
When a calculation is performed manually, some calculation errors may occur without you realizing it and this will produce incorrect results. But with a home loan EMI calculator, you won’t see incorrect results, all calculations are done with 100% accuracy.
2. Easy calculation
Using a home loan EMI calculator is simple, you don’t have to go through so much stress to calculate your EMI repayment amount. What you need is to enter the loan amount, interest rate, loan term, and processing fees (if applicable). The calculation will be done by the home loan calculator and the EMI amount will be provided by the EMI calculator.
3. Choose the right tenor
A home loan EMI calculator will help you choose the right term for your home loan. You can decide if you can afford to pay a high IME and choose a short term to pay off the loan quickly, or you can pay a comfortable IME and extend your loan term.
4. Good for loan management
If you want to take a look at your finances and see how a prepayment will help you pay off the loan before a period ends, a home loan calculator will help you do it effortlessly.
5. Compare loan offers
You can use a home loan EMI calculator to compare loan offers from different banks or financial institutions. It shows the total cost of the loan as well as the respective IMEs. This helps narrow down the best option for you and choose the right loan for your specific set of conditions.
How to calculate the EMI for your home loan
Calculating the EMI amount of your home loan is simple. You just need to enter the amount you need, the duration (in months, not years) and the interest rate in the required fields.
Stable and secure finances are always guaranteed with good planning. Calculating and knowing your home loan EMI in advance gives you a better understanding of how to plan the money you will have to spend each month.
You can do long and short term financial planning to pay for EMIs and manage regular expenses.
The mathematical formula for calculating the EMI of the mortgage is:
[P x R x (1+R)^N]/[(1+R)^N-1]
“P” represents the loan amount or the principal
‘N’ is the number of monthly payments
“R” is the interest rate per month.
Therefore, if the interest rate per annum is 11%, then the value of ‘R’ will be 11 / (12 x 100).
How to use a home loan EMI calculator?
Enter the amount of your principal loan, mortgage interest rate, and the duration of the loan in their respective locations on the EMI mortgage calculator. Alternatively, you can also use the sliders to adjust the numbers, depending on the type of calculator available on your lender’s website. Once you have successfully entered all three values, the calculator will automatically display the EMI amount of the home loan within seconds.
Plus, you can keep changing and modifying the numbers, and the calculator will show you instant and detailed results, helping you customize your home loan to suit your convenience.
Getting a home loan is not a difficult process if you know exactly what to do. Take advantage of personalized home loans online using useful tools that give you precise and instant results. A number of lenders offer these tools for free, one of these lenders is Bajaj Finserv.
With Bajaj Finserv, you simply benefit from mortgage eligibility criteria, a simple application process, minimal documentation and low interest rates from 6.75% * for the right eligibility, you get a home loan with IMEs as low as Rs. 649 / Lakh *.
Bharti Airtel disputes telecom department’s request for Rs 1,400 crore
Gold in the nation’s capital plunges Rs 491; money crumbles Rs 724
Sensex collects 580 points to reach a new record of 59,721; owl approaches 17791