A housing loan is likely to be the largest debt that a person will ever take on. It requires extensive planning and research. It’s a secured loan in which the bank mortgages your home and you must pay the bank the entire loan amount in EMIs to complete the transfer of ownership. Because of the huge loan amount, most borrowers want to keep their housing loan EMIs as low as possible. Because the loan has a longer period and large EMIs, you may have difficulty managing your expenses and savings if you take out a house loan without properly planning your EMIs.
The most important thing to do before applying for a house loan is to discover the best lender with the lowest interest rates and calculate your monthly EMIs based on your monthly budget and repayment capacity.
What is an EMI (Equated Monthly Installment) on a home loan?
Housing loan EMIs are equal monthly instalments that you must pay to the bank on a monthly basis to pay off the entire loan amount, after which the borrower will own the home completely. It comprises repaying the principal as well as paying interest on your home loan’s outstanding balance.
How do you calculate the EMI on a home loan?
The tool Housing Loan EMI Calculator, which is available on practically every lender’s website, can be used to calculate your home loan EMI. This calculator can help you figure out how much EMI you can pay each month without defaulting. The EMI calculator for a house loan gives you a clear image of how much you’ll have to pay in EMIs each month and helps you make an informed decision about your monthly expenditure for your mortgage and other miscellaneous bills. As a result, knowing your EMI is crucial for assessing your home loan eligibility and arranging your home purchase.
What is a Housing Loan EMI Calculator?
The Housing Loan EMI Calculator assists you in determining your house loan’s loan instalment, often known as the EMI. It’s a straightforward calculator that can assist a homebuyer in budgeting. You must enter your desired loan amount, the lender’s interest rate, and your preferred loan tenure to calculate your home loan EMI using the Home Loan EMI Calculator.
How to calculate your Housing Loan EMI?
The Housing Loan EMI Calculator is an online tool available on almost every lender’s website. You should use this tool to calculate your EMI on a prior basis to plan your future financial obligations and your monthly budget.
P x R x (1+R)N / [(1+R)N-1] is the formula for calculating house loan EMIs, where
- P stands for the principal loan amount
- The number of months it takes to repay a debt is denoted by N.
- The monthly interest rate is denoted by the letter R.
The following formula is used to calculate the monthly interest rate (R) on your loan: R = Annual Interest Rate/12/100
Mr. Ram, for example, has a home loan of Rs 35,00,000 from a reputable bank with a 6.75 percent interest rate over a 20-year period. The interest rate will be 0.0056 percent each month.
According to the aforementioned formula, Mr. Ram’s EMI will be: 3500000 X 0.0056 X (1+0.0056) 20 / [(1+0.0056) 20-1] = Rs. 20,631.57
As a result, it is preferable to utilise a housing loan EMI calculator to better plan your EMIs and monthly budget so that you do not have any problems paying your instalments or managing your spending in the future.
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