Buying a house is considered as the most valuable expenditure of all. It procures a roof over a family’s head, signifying the ultimate financial goal for many. But, not everyone is privileged enough to spend high amounts of capital at the drop of a hat. And, this is why people choose to avail of home loans.
A housing loan puts forth many obligations for a borrower, which is why it requires intensive financial planning before they apply for home loan. While many factors have to be assessed manually, a borrower can quickly transfer the burden of complex calculation to home loan calculators. EMI calculators are among the most widely used tools for computing monthly instalments accurately.
What Is an EMI Calculator?
EMIs are home loan instalments designed to spread the loan obligation over a repayment tenure. Almost every home loan borrower repays their obligation via EMIs. A home loan EMI calculator is a speedy yet precise online tool that enables the borrower to find out the EMI (inclusive of the home loan interest rates in India) that needs to be paid every month to disburse off the home loan. It acts as a user-friendly calculator that requires a few general inputs to calculate the payable EMIs accurately.
How to Operate a Home Loan EMI Calculator?
A home loan EMI calculator can be operated by inputting loan amount, the rate of interest and the loan duration into it. A borrower can input these terms using three methods-
- Pressing the plus and minus buttons to increase/decrease the inputs.
- Manually typing the amounts into input boxes.
- Sliding the numerical bar according to the preferred amounts.
Either way, a borrower can convert the loan duration into months or years and click on ‘quick apply’ to get the EMIs reflected in seconds. Here’s what the input terms mean:
- Loan amount – The principal amount borrowed from the lender.
- Rate of interest – The rate at which home loan interest will be charged. Home loan interest rates are in a percentage format.
- Loan duration – The period within which the borrower is bound to repay the home loan.
How Does an EMI Calculator Help Plan Financial Goals Optimally?
A home loan EMI calculator provides a clear-cut understanding of the repayable amount for your housing loan EMIs. Accurately calculated EMIs can help you make a myriad of decisions such as, management of monthly savings and expenditure, maximum limit of loan that can be availed, type and cost of the property to be chosen, secondary sources of capital contribution, the scope of prepayment, and much more.
As you can see, a home loan EMI calculator is vital for the assessment of home loan eligibility. This tool also helps decide whether you want to take an easy home loan or not for the desired property to complete the potential borrower’s financial aspirations.