You have completed your college education, graduated, and landed your dream job. What next? You marry or get married, have children and even mould your career path. And now you want to buy your dream house. Let’s talk about that.
Buying a house is a big financial decision for most people. While this is exciting, it can also be a challenge. There are numerous factors to consider when buying a house, such as location, size, and price. However, one of the most critical factors to consider is how you will finance the purchase of your house. Most people opt for a Home Loan to finance the purchase. However, before you sign up for a housing loan, it is essential you know exactly how much you will be paying each month. That’s where a Home Loan EMI calculator comes in handy.
This article highlights 8 things you need to know about a Home Loan EMI calculator.
Let’s dive in!
- What is a Home Loan EMI Calculator?
First, before everything else, you must understand what a Home Loan EMI Calculator is. EMI is an abbreviation that denotes Equated Monthly Instalment. It is the total sum of money you must pay each month to repay your home loan. As such, a Home Loan EMI calculator is an online tool that calculates the EMI amount you need to pay towards your home loan. The calculator factors in the loan amount, interest rate, and tenure of the loan to calculate your EMI.
- How to use a Home Loan EMI Calculator?
The second thing you need to know is how to use a Home Loan EMI calculator. And it turns out that using it is pretty much straightforward. All you have to do is enter the loan interest rate, loan tenure, and loan amount. Once you enter this information, the calculator will display the required EMI you must pay each month. Some calculators also offer a detailed breakup of the EMI, including the principal amount, interest amount, and the total amount payable.
- How does a Home Loan EMI Calculator work?
The third thing you need to know is how a Home Loan calculator works. A Home Loan EMI Calculator works based on the loan amount, interest rate, and tenure of the loan entered by the user. The calculator uses a mathematical equation to calculate the EMI. This formula factors into the principal amount, interest rate, and loan tenure. It then calculates the EMI by dividing the total amount by the number of months in the loan tenure.
- Benefits of using a Home Loan EMI Calculator
How do I benefit from using a Home Loan EMI Calculator? That’s the fourth thing you need to know. Well, using a Home Loan EMI Calculator has several advantages. Firstly, it accurately estimates the amount of the monthly EMI you should pay for your housing loan. That ensures that you are in the know of the exact amount you need to set aside each month to repay the loan. Secondly, it helps you make informed decisions about the loan amount, tenure, and interest rate. It allows you to experiment with different loan amounts and loan tenures to find the EMI that suits your budget. In general, the advantages of using a Home Loan EMI Calculator include:
- It is easy to use
- It is free
- It is accurate
- It saves time
- It helps you plan better
- It allows you to compare housing loan options
- It determines your loan affordability
- And above all, it can help you save money
- Things to keep in mind before using a Home Loan EMI Calculator
Fifth, what should I keep in mind before using a Home Loan Calculator?
Firstly, the calculator only gives you an estimate of the EMI based on the information entered. The actual EMI may vary depending on several factors, like the prepayment charges, the processing fees charged by your bank, and the interest rate. Secondly, the calculator assumes a fixed interest rate throughout the loan tenure. In reality, the interest rate may fluctuate based on market conditions.
- Factors that affect the EMI
Next, you need to know what factors affect the EMI. Several factors can affect the EMI calculated by a Home Loan EMI Calculator. The primary factors are the loan amount, interest rate, and loan tenure. A higher loan amount, a longer loan tenure, and a higher interest rate will result in a higher EMI. The EMI can also be affected by any additional charges like processing fees and prepayment charges.
- Get a Loan Amortisation Schedule
Did you know you can get a loan Amortisation schedule through your Home Loan EMI Calculator? That is right! One invaluable feature of the Home Loan EMI Calculator is that it generates an amortisation schedule. An amortisation schedule is a table that illustrates the monthly EMI amount, interest paid, and principal amount paid for each month of the loan tenure. This feature helps you plan your finances better and understand the total cost of your loan.
- Where to find a Home Loan EMI Calculator
Last but not least, where can you find a Home Loan EMI Calculator? You will be happy to know that a Home Loan EMI Calculator is easy to find because most banks and financial institutions have it on their websites. Additionally, several third-party websites also provide Home Loan EMI Calculators. It is crucial to ensure that the calculator is reliable and provides accurate results before using it.
Conclusion
There you have it! These are the 8- things you must know about a Home Loan EMI Calculator.
But do note: A Home Loan EMI Calculator is a handy tool to help you calculate your monthly EMI towards your housing loan. It is essential to realise that the calculator only provides an estimate, and the actual EMI may vary. However, the calculator can help you make informed decisions about the loan amount, tenure, and interest rate.