Financial planning becomes a crucial aspect especially while individuals are targeting to purchase their dream homes. However, handling the monetary intricacies is always easier said than done. To address the issue, lenders these days provide an online home loan calculator on their website to assist borrowers. In this article, its usage and benefits have been discussed briefly.
The power of a home loan EMI calculator: Why depend on it over manual calculation
All calculators available online utilise a home loan calculation formula to compute the EMIs. Here is the formula:
EMI amount = [P x R x (1+R) ^N]/ [(1+R) ^N-1]
Here, e denotes the EMI a borrower has to repay each month. Additionally, p, r and n denote principal borrowers, rate of interest and loan tenor respectively.
So, for instance, if a person applies for a loan of Rs.25 lakh over a tenor of 10 years at an interest of 12%, then their EMIs will be:
e = [20,00,000 x 12 x (1+12) ^ 10] / [(1+12) ^ 10-1] = Rs.35,868.
Now, each time one can find their EMIs by using the formula. Or else, they can simply use a home loan calculator as that ensures:
More affordability
Calculators allow the users to experiment with different principal amounts, tenors, interest rates and so on. As a result, it becomes very convenient for a person to determine the EMI that suits their affordability. This step is very crucial while a borrower is trying to sum up their repayment plan.
Live comparisons
With the calculator, a borrower can compare the various potential loan offers in a single place. As the offers are switched, one can see the changes in the total payable interest, overall cost, and EMIs over their device screen.
Optimal loan parameters
As an effect of the above two pointers, it becomes much easier for one to choose the right loan. By right loan, it is meant that the borrower has picked an offer that matches their desired long-term and short-term financial objectives. Also, the associated features help one prioritise the loan product that offers the lowest EMI.
Overall better budgeting
Online tools calculate housing loan EMI online in a moment to simplify budget making. Because of this, the borrowers exactly know how much they should keep aside to avoid financial stress throughout the loan repayment period.
Additional advantages of using a home loan EMI calculator
Keeping aside the budgeting part, an online housing loan calculator assists one in saving precious time. It genuinely removes the opportunities for an error calculation.
Plus, no one needs any additional subscription to use this kind of calculator on their preferred lender’s platform. Most importantly, these calculators are too simple to use.
How to use a home loan EMI calculator?
All one has to do is following these steps:
Step 1: Enter the loan amount or principal
Step 2: Adjust the interest rate as per agreement with the lender
Step 3: Select an optimal tenor
On following these few steps the payable EMI will appear on the screen.
For the best deals, one can accept various pre-approved offers announced by lenders for their existing borrowers. These apply to various financial products like loans against property, and home loans, depending on the borrower's credibility. These offers speed up the home loan application process. Individuals can check their pre-approved offers online by entering their name and contact details on the lender's website.
A home loan calculator is an efficient way to get the best possible deal available in the market. So, they must make sure to seize the opportunity and grab an offer that makes the homeownership journey a lot easier.
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