home loan emi calculator

Home Loan EMI Calculator – Installment of Happiness

Finance

Giving wings to your dream is important to have a sense of accomplishment in life. The goals achieved create a pleasant memory for the life time. Some people have the wish to settle in their own home and work hard to fulfill the same desire.

The hindrance they face is shortage of funds. Buying house requires huge capital investment and therefore, you have to be prepared in advance for the same. But if you haven’t saved, there is an alternate to it as well. You can avail home loan that can serve your immediate purpose and pay the credit amount in small chunks (installments). The installment can be calculated using the Home loan EMI Calculator.

Home Loan EMI Calculator

For those who want to anticipate and check how much repayment they have to make on the loan availed, a tool name EMI Calculator is available. It is an online tool that assist in computing the total repayment amount. It computes the amount of interest an individual has to pay on the loan. Using the calculator, the customer can calculate the monthly installment at the expected rate of interest. Also, you can compare the repayment amount at various interest rate offered by various lenders.

It is easy to use the calculator. The information is processed on insertion of the details such as loan amount, tenure and rate of interest. Once these details are inserted in the calculator, it processes the required information. Let’s check how the calculator works:

For Example: A candidate wants to know the home loan interest rates he has to pay on the loan of ₹1,00,00,000 taken for the period of 20 years at 8.50% p.a. interest rate. He uses the calculator to calculate the same. On placing the relevant details in the calculator the displayed result is as given below:

Monthly Installment – ₹ 86,782

Total Interest Amount – ₹ 1,08,27,758

Total Repayment Amount – ₹ 2,08,27,758

Benefits of Using the Calculator

Using the EMI Calculator, the customer has the following benefits:

  1. Easy to use – It is simple and easy to use the calculator
  2. Quick result – The result are displayed spontaneously
  3. Accurate Calculation – The calculation result is accurate and correct.

Pre-requisite to use the Calculator

To get the required result, the customer has to enter the mandatory details in the relevant fields that include –

  • Home Loan Amount
  • Interest Rate
  • Tenure

How is Interest Calculated?

There are two types interest rates – fixed and floating interest rates.

Fixed Interest Rate – Fixed rate of interest means that the loan is charged at the same rate of interest during the entire tenure of the loan. The EMI amount remains same throughout the tenure.

Floating Rate of Interest– In loan charged on a floating rate of interest the EMI fluctuates during the loan tenure. The installment amount varies with the variation in the interest rate. The rate changes as per the bank’s policy and hence the interest on a loan is calculated on the new rates.

There are certain factors that affect the rate of interest on which the loan is offered to an individual. Those factors are as follows:

Factors Affecting Home Loan Interest Rate

  • Income – The income of the applicant is the major factor that helps in deciding the loan eligibility and the rate of interest. The salary or the revenue earned by the applicant during a financial year is a major concern of all the lenders. The applicants with high income get loans at an attractive rate of interest.
  • Credit History – Another important factor that helps in deciding the lending rate is the credit history of the applicant. The applicant having clear records and good credit score are likely to get a loan at pleasing rates.
  • Location of Property – Unlike other loans, in a home loan the location and the surroundings of property make much of a difference. Even the name of builder/agency you are purchasing home from impacts the eligibility and rate of interest. So, it is advisable to buy a house from the trusted builders.
  • Value of Property – The value of property too affects the housing loan interest rates.

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