As soon as the home loan disbursal happens, all eyes are on the equated monthly installments (EMIs), a portion of interest and principal amount that get paid out from your pocket. But if you want to enjoy an assured home loan journey, you need to wake up early. Means, you must know the amount of EMI before you get hold of the loan.
It is critical to know the EMI beforehand as the ignorance of the same can cause ripples in your financial life cycle. In case the indicative installment is beyond your ability to pay, chances of you defaulting on the loan repayment will be more and more prominent.
A customer with a know-how of EMI in advance is well placed to enjoy bonhomie with a home loan for 20-30 years, the tenure for which you can avail it. So, the overriding question here is, how to know the amount of EMI? The answer lies in the Home Loan EMI Calculator.
Home Loan EMI Calculator Work:
The operation of the EMI calculator is easy to understand. Basically, the calculator makes use of the loan amount, tenure and rate of interest to give a view of the EMI. The calculator computes the EMI on the basis of a formula shown below.
EMI= [P x R x (1+R)^N]/[(1+R)^N-1]
Where P= Loan Amount
R= Rate of Interest
N= Number of Monthly Installments
All you have to do is to enter these variables and get the indicative EMI before you. The calculator not only calculates the EMI but also bifurcates the amount of principal and interest.
For example- You are planning to avail a home loan of Rs. 30 lakhs from HDFC Bank for a period of 20 years. Suppose the interest rate offered to you is 9.20% p.a. Taking a cue from the formula, the EMI comes out to be Rs. 27,379. While the interest payable and total liability for the repayment will thus be Rs. 35,70,927 and Rs. 65,70,927, respectively.
Benefits of Home Loan EMI Calculator:
The calculator comes with a myriad of benefits, such as:
Accuracy- The most important aspect of EMI calculator is the accuracy at which the EMI is derived. The accuracy is ensured by the algorithm used in the calculator. With a mere entry of loan amount, interest rate and tenure, you can get accurate results of EMI depicting both interest and principal portions.
Time Saving- The time required to calculate the EMI is minimal as you do not have to approach the lender to know the same, All you need is to put the respective values and get the result within a second, ensuring economy of time.
Ease of Use- The operation is easy to understand and offers you a hassle-free experience, much better than the situation wherein you have to visit the branch and enquire the same from the official down there. So, why not sit down and use the home loan EMI calculator for a better and rewarding stay at your dream home.
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