Importance of EMI calculator for Getting a Home LoanPurchase & Refinance Mortgage LoansUpdated on Jul 25, 2018 View more like this | Visit India, UN | Contact Anamika Verma |
When you are borrowing a Home Loan, knowing the value of your EMIs is essential. After all, this will help you be doubly sure about your decision to borrow funds. A Home Loan EMI calculator is a handy tool that can help you do just this, and eliminates the hassle of manually performing the calculations.
Take a look at some of the aspects that you will be able to understand better when you use a Home Loan EMI calculator.
The Value of Your EMIs:
The primary purpose of an EMI calculator is computing your loan’s EMIs for you even before you take the Home Loan. This helps you understand the amount that you will have to pay and can help you make preparations accordingly. For example if you borrow a principal of Rs.20 lakh for 36 months, your monthly EMIs will be Rs.63,042. Once you have this figure, you can accordingly prepare an expenditure budget to meet the expense of your EMIs.
The Impact of the Tenor:
The tenor directly impacts affordability of your loan, and you can use a Home Loan EMI calculator to see how this happens. For example, if you have borrowed Rs.20 lakh for 36 months at an interest rate of 8.4%, your EMI would be Rs.63,042. However if you increase this tenor to 48 months, your EMI would fall to Rs.49,202 and further to Rs.40,937 if you increase tenor to 60 months. On the other hand, reducing the tenor to 24 months will mean that you have to pay EMIs to Rs.90,820.
While carrying out this calculation manually is difficult and time-consuming, with the EMI calculator, you can simply enter the tenor of your choice and make a decision about whether you want to take a short tenor of 24 months and pay a higher EMI, or benefit from paying lower EMIs of Rs.40,937 by taking a long tenor of 60 months.
Get a tenor of your choice, up to 25 years, by applying for Home Loan from Bajaj Finserv. Apart from the competitive rate of interest, you can enjoy quick approvals, online application and top-up loan facility.
The Impact of the Principal:
The Home Loan interest calculator also helps you understand how changes in the principal can lead to changes in the EMI. Continuing with the earlier example, with the interest being the same and the tenor being 60 months, if you increase the principal to Rs.30 lakh, your monthly EMI would be Rs.61,405 per month, instead of Rs.40,937. Thus, you can try various principal amounts to see what is the maximum amount that you can borrow without going beyond your budget. However, it is never a good idea to borrow more than what you need as this will weigh down your finances.
The Impact of the Rate of Interest:
The interest rate has the most significant impact on the cost of borrowing a Home Loan. If you know the actual rate of interest that a lender is willing to offer you, use it to calculate your EMI. Or else, you can use the rate advertised on the lender’s website. When you carry out this exercise for various Home Loans offered by different lenders, you will be able to see which one is more affordable, by identifying the lowest EMI. The beauty of this calculator is that you can draw all these inferences before you apply for a Home Loan.
Consider the same example, where you are taking a loan of Rs.20 lakh for 60 months. While one lender may offer you a rate of interest of 8.40%, another may offer you an interest rate of 10%. Although the difference may not seem like much, in reality, it makes a sizeable difference. While the loan with the lower interest rate will have you pay Rs.40,937 per month, if the rate is 10%, you will have to pay Rs.42,494. Over the course of the tenor, you will have to pay almost Rs.1 lakh extra. An EMI calculator will give you these results in under a minute and give you clarity about which loan you should pick.
So, to understand the expense that you are likely to incur, and how various components impact your EMI, make use of a Home Loan EMI calculator. It will give you accurate and reliable results instantly.
Also Watch:
Take a look at some of the aspects that you will be able to understand better when you use a Home Loan EMI calculator.
The Value of Your EMIs:
The primary purpose of an EMI calculator is computing your loan’s EMIs for you even before you take the Home Loan. This helps you understand the amount that you will have to pay and can help you make preparations accordingly. For example if you borrow a principal of Rs.20 lakh for 36 months, your monthly EMIs will be Rs.63,042. Once you have this figure, you can accordingly prepare an expenditure budget to meet the expense of your EMIs.
The Impact of the Tenor:
The tenor directly impacts affordability of your loan, and you can use a Home Loan EMI calculator to see how this happens. For example, if you have borrowed Rs.20 lakh for 36 months at an interest rate of 8.4%, your EMI would be Rs.63,042. However if you increase this tenor to 48 months, your EMI would fall to Rs.49,202 and further to Rs.40,937 if you increase tenor to 60 months. On the other hand, reducing the tenor to 24 months will mean that you have to pay EMIs to Rs.90,820.
While carrying out this calculation manually is difficult and time-consuming, with the EMI calculator, you can simply enter the tenor of your choice and make a decision about whether you want to take a short tenor of 24 months and pay a higher EMI, or benefit from paying lower EMIs of Rs.40,937 by taking a long tenor of 60 months.
Get a tenor of your choice, up to 25 years, by applying for Home Loan from Bajaj Finserv. Apart from the competitive rate of interest, you can enjoy quick approvals, online application and top-up loan facility.
The Impact of the Principal:
The Home Loan interest calculator also helps you understand how changes in the principal can lead to changes in the EMI. Continuing with the earlier example, with the interest being the same and the tenor being 60 months, if you increase the principal to Rs.30 lakh, your monthly EMI would be Rs.61,405 per month, instead of Rs.40,937. Thus, you can try various principal amounts to see what is the maximum amount that you can borrow without going beyond your budget. However, it is never a good idea to borrow more than what you need as this will weigh down your finances.
The Impact of the Rate of Interest:
The interest rate has the most significant impact on the cost of borrowing a Home Loan. If you know the actual rate of interest that a lender is willing to offer you, use it to calculate your EMI. Or else, you can use the rate advertised on the lender’s website. When you carry out this exercise for various Home Loans offered by different lenders, you will be able to see which one is more affordable, by identifying the lowest EMI. The beauty of this calculator is that you can draw all these inferences before you apply for a Home Loan.
Consider the same example, where you are taking a loan of Rs.20 lakh for 60 months. While one lender may offer you a rate of interest of 8.40%, another may offer you an interest rate of 10%. Although the difference may not seem like much, in reality, it makes a sizeable difference. While the loan with the lower interest rate will have you pay Rs.40,937 per month, if the rate is 10%, you will have to pay Rs.42,494. Over the course of the tenor, you will have to pay almost Rs.1 lakh extra. An EMI calculator will give you these results in under a minute and give you clarity about which loan you should pick.
So, to understand the expense that you are likely to incur, and how various components impact your EMI, make use of a Home Loan EMI calculator. It will give you accurate and reliable results instantly.
Also Watch:
