The growing popularity of advances to fund the purchase of residential and commercial properties is owing to the exponentially rising prices in the real estate sector. Subsequently, innovative financial tools have been introduced to streamline the repayment process of housing loans. This ensures the convenience of potential borrowers to manage their financial agreements before and after availing a loan. One such financial tool is house loan calculator that helps individuals to have an estimate about the monthly payments that they need to make throughout the loan tenure.
Considering that with loans, the amortisation process to calculate EMIs includes the power of compounding in the reverse direction; borrowers often face challenges to draw an estimate of the EMIs to be paid. With calculators, applicants can easily look into the monthly equated instalments that repay their credit, tally it with their current financial obligations and then decide upon the loan amount they can afford to repay.
Factors affecting EMIs of home loans
While housing loans ensure that potential home buyers can meet their financial requirement of purchasing properties, individuals need to borrow as per their repayment capability. It ensures the borrower avoids unnecessary stress on the finances. Hence, he/she needs to calculate the EMIs prior to availing a loan with the help of an EMI calculator. Here are the following factors that affect EMIs of home loans –
- Loan amount.
- Chosen repayment tenure.
- Rate of interest.
While secured advances like home loans come with a competitive rate of interest, having a healthy credit score can assure that you get the best terms and conditions on your financial deal. It may include lowering the rate of interest, sanctioning of the requested loan amount or speeding up the loan processing. All of these have a considerable impact on the EMI amount and can hence reduce the financial burden during repayment.
Thus, borrowers can make the most of their availed advances by simply settling for a suitable lender. They can earn multiple benefits by calculating EMIs before taking a home loan.
How to use home loan’s EMI calculator?
Keeping in mind the convenience of potential borrowers, reputed lenders offer EMI calculators to calculate instalment on their Home Loan. This financial tool is easy to use and calculates accurate EMI values in no time. Here’s how to operate it:
Step 1: Provide the required loan amount
Make sure to calculate an estimate of the loan amount required as per the property value. Following this, provide the principal amount that would be adequate to cover the purchase of your property post the down payment you can afford. Remember to borrow not more than what is required to save yourself from further inconvenience during home loan repayment.
Step 2: Choose the rate of interest as per your preferred lender
Now, since home loans are long-term loans, choosing a lender that offers a lower rate of interest is essential to curb the total cost of loan. Thus, remember to conduct a thorough survey of the financial market and settle for one that provides the least home loan interest rates.
Step 3: Choose repayment tenure
Approaching a reputed lender and availing their financing options ensures that you get to choose a convenient repayment tenure up to 240 months. This makes repayments as per the convenience of a client. You can opt for –
- Shorter tenure and higher EMIs, or
- Longer tenure and lower EMIs
Using the EMI calculators, you can thus plan your future finances in advance and negate chances of defaulting. Choose your convenient terms and enjoy lucrative features against minimum home loan eligibility criteria and nominal documentation.
Apart from streamlining the repayment process of a loan, EMI calculators are also considered beneficial financial tools because –
- It can be used to compare EMIs from various lenders and then settle upon one that best caters to one’s repayment capability against the present financial obligations.
- It is a user-friendly financial tool that can be used anywhere and multiple numbers of times to plan finances based on the upcoming repayment schedule.
Thus, using the EMI calculator and knowing the EMI amount before applying for a loan will help you handle your finances more efficiently.