Introduction
Home Loan EMI Calculator: Those without a house dream of buying a house. Homeowners dream of growing up. People who own more than one house in one city also dream of owning houses in other cities. There are a dream house, duplex apartments and villas. That being said, the list is endless. But for first-time homeowners who have home-buying doubts, Openplot explains loan calculations to you.
Table of Contents
- What is the Home Loan EMI Calculator?
- How to Calculate Home Loan EMI Calculation
- Home Loan EMI Calculation Formula
- Benefits of Calculating Home Loan EMI
- Frequently Asked Questions
Home loans are a viable option for everyone, but many do not know how to calculate home loan EMIs. Long-term debt challenges can be daunting for many people. In today’s era, home loans are a boon for those who want to buy a home. However, understanding the intricacies of calculating EMIs can be overwhelming for people not financially savvy.
All you need is preparedness and agreeing to all the conditions for taking the loan. A way to manage monthly instalments with information and knowledge while keeping yourself safe from pitfalls. With the help of home loans, you can get the house you want even if you don’t have everything you need.
What is the Home Loan EMI Calculator?
Your planning before getting a home loan should include your loan-paying ability while balancing your finances. Calculating monthly outgoings in advance helps you plan your remaining expenses better. It is important to consider potential changes in income or expenses that may affect your ability to make future loan payments.
You want to apply for a home loan of INR 32,00,000. However, depending on your profile, the lender will tell you that the applicable interest rate will be around 8%. You are unclear about the correct tenure. You decided to use this device. Here are the possible outcomes for different tenures.
| Parameters | 5 Years | 10 Years | 15 Years | 20 Years |
| Loan amount | INR 32,00,000 | INR 32,00,000 | INR 32,00,000 | INR 32,00,000 |
| Interest rate | 8% | 8% | 8% | 8% |
| EMI | INR 64,884 | INR 38,825 | INR 30,581 | INR 26,766 |
| Interest Payable | INR 6,93,068 | INR 14,58,980 | INR 23,04,556 | INR 32,23,860 |
| Total Payable | INR 38,93,068 | INR 46,58,980 | INR 55,04,556 | INR 64,23,860 |
How to Calculate Home Loan EMI Calculation
Before getting a home loan, your plan should include your loan-paying ability while balancing your finances. Do this before you approach the bank. They provide you with loans only based on your repayment capacity. So you can verify the bank statement. Checks are planned to be refunded. A home loan helps in securing the repayment period.
Repayment of your home loan consists of principal amount and interest. Payments are made through Equated Monthly Installments (EMI). Equated Monthly Installments (EMI) consist of two parts
- Principal Loan Amount: The loan amount applied for and disbursed to you.
- Loan Interest: The added cost of borrowing an amount that is compounded over the repayment period.
Home Loan EMI Calculation Formula
Using the home loan EMI calculator formula, you can easily determine the monthly instalment amount you need to pay for your home loan. This formula considers the loan amount, interest rate, and tenure for an accurate EMI calculation. It can help you plan your budget and manage your finances effectively.
| Formula: EMI = P x R x [{(1 + R) ^ N} / {1 – (1+R) ^N}] |
- P stands for the principal loan
- R is your monthly interest rate [(annual rate/12)/100]
- N is the total number of months in the loan tenure.
To use this formula, you need to follow some simple steps mentioned below:
- Visit the lender’s website
- Navigate to the Home Loan Calculator page
- Enter your loan amount
- Use the slider to select an interest rate
- Move the slider to choose the repayment period
- Press ‘Submit’, and the result will appear on your computer or smartphone screen.
Benefits of Calculating Home Loan EMI
After completing the home loan EMI calculation, you will see what you are embarking on. The figures help calculate additions or subtractions to the principal sum based on your capacity for repayment. So, what are the benefits of calculating the home loan EMI?
- You can choose the home loan amount at your convenience
- An amount that will help you manage your EMIs better
- An amount that won’t hurt your financial balance
Conclusion
This is a must-follow for all home loan aspirants. After estimating your monthly expenses, estimate how much you can afford in your EMIs. Only then will you be ready to take a home loan. Otherwise, you will have to experience a peaceful life later. So caution is needed. How much interest do you pay monthly using the Home Loan EMI Calculator? It would be a very good idea to estimate how many months the baby will be born. For more information, visit openplot.
| Also read Land Loan vs. Home Loan: Which One is the Better Option? Home loans have a longer tenure than land loans. The maximum home loan tenure is 20 years, while land loans are offered up to 15 years. There are certain benefits of taking home loans. Top 5 Ways to Reduce Home Loan Interest Rate You lower your home loan interest rate by financing it at a lower rate. This will reduce the interest on your loan and save you money. Improving your credit score can also help you qualify for a lower interest rate on your home loan. |
Frequently Asked Questions
Q. What is the formula for calculating Home Loan EMI?
- A. EMI = P x R x [{(1 + R) ^ N} / {1 – (1+R) ^N}]
- For example: EMI = ₹10,00,000 * 0.006 * (1 + 0.006)120 / ((1 + 0.006)120 – 1) = ₹11,714. Calculating EMI manually using a formula is tedious. EMI calculator from banks helps you calculate your loan EMI easily.
Q. How much is the EMI for a 20 lakh home loan?
A. 20 Lakh Home Loan EMI Details
| TENURE | EMI AMOUNT(INR) |
| 5 Years | ₹40,985 |
| 10 Years | ₹24,744 |
| 15 Years | ₹19,636 |
| 20 Years | ₹17,293 |
| 25 Years | ₹16,037 |
| 30 Years | ₹15,307 |
Q. Is taking EMI for a loan good or bad?
A. Building Credit Score: Timely payment of EMIs contributes positively to an individual’s credit score. This will benefit future financial endeavours like getting loans for important purchases like a house or a car. Responsible use of EMIs reflects well on the individual’s creditworthiness.