Buying a home is expensive nowadays. Therefore, your existing savings may not be sufficient to meet such substantial expenses. Hence, it is ideal to apply for a home loan to finance a house purchase.
If you plan to purchase a house and wish to borrow approximately Rs. 25 lakhs as a housing loan, it is crucial to calculate Rs. 25 lakhs home loan EMI beforehand to plan your budget accordingly.
Calculation Process of Rs. 25 Lakhs Home Loan EMI
You can easily calculate your Rs. 25 lakhs home loan EMI using a simple formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
P refers to the loan amount or principal amount
R refers to the monthly interest rate
N refers to loan repayment tenure or the number of monthly instalments
Suppose you have borrowed a home loan of Rs. 25 lakhs from a lender. The loan repayment tenure is 30 years, and the interest rate is 6.7% per annum. So, the calculation of the monthly instalment is as follows:
EMI = [25,00,000 x 0.56 x (1+0.56)^360]/[(1+0.56)^360-1] = Rs. 16,132
Note that this is an approximate calculation of an EMI amount. The actual amount may vary.
Manual calculation of a housing loan EMI can be cumbersome. Therefore, use an online tool like a home loan EMI calculator to minimise your effort and save your valuable time. You need to input the loan amount, interest rate and tenure to get an accurate result in a few minutes.
Factors Impacting Rs. 25 Lakhs Home Loan EMI
Listed below are a few factors that affect your EMI payments towards a home loan of Rs. 25 lakhs:
- Loan amount
The EMI payable toward your home loan depends on the borrowed loan amount. This means that EMIs for Rs. 25 lakhs will be higher than any loan amount lesser than that.
- Interest rate
A higher interest rate means you need to pay more money in EMIs and vice-versa.
- Repayment tenure
A long repayment tenure leads to a lower EMI amount. However, the total interest outgo is increases which in turn, increases the total cost of the loan.
- Credit score
An optimum credit score of 750 or above will help you to obtain a lower interest rate on your home loan. This is because a higher credit score decreases the risk of default in repayment.
- Location of the property
If the property is in a posh location, your lender may levy a lower interest rate, leading to lower EMIs.
Ways to Reduce Rs. 25 Lakhs Home Loan EMI
Mentioned below are a few ways to reduce EMI for a home loan of Rs. 25 lakhs:
- Choose a home loan with a lower interest rate
Compare the interest rates offered by different lenders before applying for a home loan. This will help you to select one with the lowest interest rate, which translates to lower EMIs.
- Make a sizeable downpayment
Making a substantial downpayment of more than 20 to 25% will reduce the burden of EMI payables by decreasing the outstanding amount.
- Choose a long repayment tenure
As mentioned earlier, repaying your home loan over a long tenure will reduce your EMI payments but increase the interest outgo. So talk with your lender to restructure your home loan and decrease the repayment tenure. Alternatively, you can also start making partial prepayments.
Now, once you know all the details of Rs. 25 lakhs home loan EMI, go through the information on how you can avail a home loan of Rs. 25 lakhs.
Eligibility Criteria to Qualify for Rs. 25 Lakhs Home Loan
You must fulfil certain eligibility parameters before applying for a home loan of Rs. 25 lakhs:
- Your age should be a minimum of 18 years to become eligible for a home loan. However, some lenders also set the age limit to 21 years to qualify for a home loan.
- A specific amount of income per month and a minimum number of years of experience, as specified by your lender.
Note that the above list of eligibility criteria is indicative and may vary with each lender.
Stepwise Guide to Apply for Rs. 25 Lakhs Home Loan
Follow the simple steps to apply for a home loan of Rs. 25 lakhs:
Step 1: Visit the website of your preferred financial institution.
Step 2: Enter a few essential details such as your contact number, date of birth, income, employment status and PAN card details.
Step 3: Select the loan amount and tenure.
Step 4: Verify your identity through a safe online procedure. Once verification is complete, the approved loan amount will be credited to your account within the least possible time.
So, this is how you can avail a home loan of Rs. 25 lakhs. Moreover, make sure you calculate Rs. 25 lakhs home loan EMI in advance to avoid any hassles later.