Home loan EMI calculator is an easy to use online tool that allows people to calculate the EMI amount that is affordable for them to repay. Read on to know more about this online tool.
What is EMI Calculator?
A home loan EMI (Equated Monthly Instalment) calculator is an online tool that helps you to compute the EMI for your home loan. Repaying the home loan requires meticulous financial planning. It is paramount to assess your financial situation and your repayment capacity before applying for a loan. This will help you avoid financial hassles.
A home loan EMI calculator can be of great help to you in this regard. It is a free tool that you can use anytime to calculate the exact EMI instalment. Based on the details you provide, the calculator gives an accurate EMI amount.
How does the home loan EMI calculator work?
Most EMI calculator uses the following formula to calculate the EMI amount –
EMI = [P x R x (1+R)^N] / [(1+R)^N-1]
P is the principal amount (the amount you have borrowed)
R is the interest rate (interest levied by the lender)
N is the loan tenure
You can use the above formula to calculate the EMI manually, but, manual calculation can be time-consuming and complicated. Hence, it is advisable that you use the online calculator for the same.
Benefits of using Home Loan EMI Calculator
- Easy calculation
Using a home loan EMI calculator is the easiest way to know the exact amount you must repay every month. The tool is easy to use, you must enter a few important details like the loan amount, loan duration and the interest rate. The tool will automatically do the computation; you need not worry about the complication of calculating the EMI.
- Helps in choosing the right loan tenure
Knowing the amount can help you in choosing the right duration for your home loan. If you can afford to repay a higher amount, you can choose a shorter loan tenure, and pay off the loan faster. But, to ensure that your EMI is affordable, you must go for a longer tenure.
- Compare offers
One of the significant features of a home loan EMI calculator is that you can compute the EMI account multiple times using the different combination of inputs. You can change the duration, interest rate, and the loan amount to arrive at the right figure that is affordable to you. This also means that you can compare the loan offers from different lenders and choose the best lender that is feasible for you.
- Better loan management
While you are repaying the EMIs, over the years, you may have some additional funds that you can use to make an additional payment towards your loan. If you want to check your finances and see how making an extra payment can help you pay off the loan faster, the home loan EMI calculator can help you do that.
- Know the exact breakup of the EMI
Another significant benefit of using the EMI home loan calculator is that it helps you understand the various charges associated with the loan such as processing fees and the interest. Most lenders present these charges as part of the loan amount, knowing the actual value can help you know the exact cost of the loan.
Thus, with so many benefits of using the home loan EMI calculator, it is advisable that you use it to know the EMI in advance and plan your finances accordingly. This will help you make the necessary arrangements for the funds and avoid defaulting on the loan.