Home loan repayment calculators are only some add-on services that lenders offer so that borrowers can make an accurate calculation of their monthly repayment before availing a loan. The metrics of this calculator varies from one lender to another, but some basic parameters like loan amount, interest rate, tenor, etc. are common.
This EMI calculator helps borrowers to decide whether they can afford a long term financial commitment like a housing loan or not. Furthermore, it helps borrowers to plan their long-term finance accordingly.
Features of a Home Loan Repayment Calculator
- Easy and accurate calculations
Home loan repayment calculators are convenient and easy to use. They allow customers to calculate their EMIs without any mistakes. Instead of calculating it manually, borrowers can use this online home loan calculator to find out their equated monthly instalment within seconds. It eradicates the chance of calculation mistakes.
- Detailed analysis
Apart from that, such calculators are very useful. They take only seconds to provide borrowers with a detailed analysis of their credit. They can change different metrics like loan amount, tenor, interest rate, etc. to learn more about their EMI and total debt.
- Customised calculation
These home loan EMI calculators provide a customised solution to its users. Individuals can use this calculator to get tailor-made results by entering their desired amount, tenor, etc.
- Comparative analysis
This calculator helps borrowers to compare home loan offers provided by different financial institutions. Using this calculator wisely borrowers can find out the amount of money they can save by opting for a particular financial institution.
- Understand the product better
Instead of going through the details of a home loan in brochures or web-content and trying to figure it out, borrowers can use these calculators to gain a better understanding of their home loan. Since these calculators are easy to use, they offer customers a better understanding of the product.
How is home loan EMI calculated?
Home loan EMI is calculated through the mathematical formula –
EMI = [P x R x (1+R)^N]/[(1+R)^N-1], here ‘P’ stands for principal or the loan amount, ‘N’ stands for the number of monthly instalments and ‘R’ stands for the rate of interest. Calculating EMI by using this formula is very easy. Borrowers have to enter the desired loan amount, the number of instalments and the rate of interest in the respective fields and they can figure out how much home loan EMI they can afford.
However, the chances of making a mistake are also high with manual calculation. Such errors can be easily mitigated by using a home loan repayment calculator. These calculators are very easy to use, borrowers have to visit the website of the lender of their choice and enter the details like loan amount, tenor and interest rate to figure out their EMIs. Additionally, these calculators also offer a detailed break-up of the entire debt.
Advantage of knowing EMI in advance
The benefit of knowing EMIs in advance is that it enables borrowers to plan their finances. They get a better understanding of the interest liability and can therefore even plan for part prepayment and foreclosure to reduce the same over the tenor.
Thus, individuals planning to avail a home loan once they have made their calculations with a home loan repayment calculator can do so by contacting a financial institution of their choice.
Home loans typically include borrowing a large sum, and it is a long term debt. Thus, if used diligently, a home loan repayment calculator can assist borrowers in planning their finances effectively to avoid payment default and reduce overall liabilities.