The repayment liability created out of a home loan can involve your finances for a long duration spanning over up to 30 years. While it should not be a deterrent to availing a home loan, you must check how much home loan EMI you can afford and ensure that the EMIs payable accommodate easily within your income capacity without creating any strain on your finances. 

To ease such a crucial assessment, lending institutions thus provide dedicated financial tools like a home loan EMI calculator. These financing tools are quick, accurate, and easy to use with an intuitive interface understandable by anyone. Let’s take a better look at the advantages you can receive from an EMI calculator’s use.

Top 10 benefits of using a housing loan EMI calculator

• It assists with a suitable loan amount selection

As an EMI computing tool, the calculator allows users to assess better if the loan amount they have selected is suitable as per their financial standing and repayment capacity or not. When using the calculator, you can thus better differentiate between the home loan amount you seek to avail and the loan amount suitable as per your income.

• Tenor selection is made easy

Just like suitable loan amount selection, you can also choose an appropriate tenor for repaying your home loan affordably using the home loan EMI calculator. When choosing a tenor for your loan repayment, you must know the changes it creates on your EMIs payable. For instance, when selecting a long tenor, your EMIs come down, improving loan affordability, thus helping you assess how much home loan EMI you can afford. On the contrary, a short tenor your repayment liability and helps wrap up loan repayment quickly.

Further, just as it is important to know your loan EMIs, it is equally crucial to know the benefits of calculating these EMIs before borrowing.

• Better assessment of your total loan liability

When using the EMI calculator, you are required to enter the loan amount you plan to avail along with a suitable tenor and the current home loan interest rate applicable to the advance. Based on these entries, the calculator computes three distinct values, of which EMI is the most prominent one. The other two, namely the total loan liability and the total interest payable, are crucial for making a suitable borrowing decision as well. While the total loan liability reflects the loan principal and the total interest accrued, computation of the latter is worth assessing. Both loan amount and tenor increase result in higher interest payable. This overall idea regarding the repayment values allows for better assessment of how much you should borrow.

• Quick and accurate results with minimal manual intervention

As already mentioned, the home loan EMI calculator requires you to make only three entries, based on which it computes the results. The amount of EMIs payable along with other values obtained are closely accurate as per your entries as they are based on a set EMI computation formula. The results are displayed immediately after the entry and require minimal human intervention for computation.

Reputed financial institutions providing home loan in India provide these financial tools for borrowing assessment.

While the process of home loan in India is simple, some lenders also bring pre-approved offers to make financing quick and convenient for individuals. You can avail these offers on loans against property, home loans, and a range of other financial products. You can easily check pre-approved offers by using  your name and contact number.

• Loan offer comparison

You can also compare the feasibility of different loan offers available under your radar. Based on the repayment values obtained, you can choose the most suitable loan offer to go forward with and apply. Make sure that you meet all home loan eligibility requirements before applying for the selected offer for easy approval.

• Borrowers can be better informed of loans outstanding each year

Along with the total loan liability, the calculator also computes the amortisation table, indicating a detailed analysis of loan repayment with total outstanding after each repayment year completion. Based on these values, you can make strategic repayment decisions like when to transfer your loan balance for better rates.

• Assists with timing your prepayments better

The amortization schedule computed also indicates the principal-interest component break-up of each EMI payable towards home loan repayment. As prepayments involve loan repayment in part or in full at any time before the tenor ends, choosing a suitable time is essential as it can mean minimised interest outgo and enhanced savings.

When using a home loan EMI calculator, know that it is only a computation based on the loan amount and tenor you selected. The EMIs payable for your home loan actually availed can thus vary based on the loan amount and tenor your lender approves. When assessing your borrowing decisions, use an eligibility calculator as well to know how much you should avail of as a loan and proceed with your application accordingly.