RBI’s decision to slash the average base rate has reduced the interest rates on housing loans. This has come as a boon to many individuals who wanted to invest in real estate.
However, apart from the home loan interest rate, several other factors such as the loan amount and the repayment tenor determine the loan affordability. Individuals can learn about the impacts of these factors using helpful tools such as a home loan calculator. With a home loan EMI calculator, a borrower can easily compute the amount they will need to pay as EMIs for repayment.
A home loan calculator can help estimate your monthly instalments and plan your finances accordingly.
Key Benefits Of Using A Home Loan Calculator
An online home loan EMI calculator is a highly useful financial tool that comes with several benefits. These include –
- Accurate results
An online home loan calculator is programmed with mathematical formulae which enable it to provide accurate results. Manually calculating the EMI amount can be confusing, time-consuming and prone to errors. With a home loan calculating tool, one can be sure to obtain correct results every single time.
- Easy to use
Apart from being fast and accurate, a housing loan calculator comes with a simplified user interface making it quite easy to operate. One has to provide the following values to find the estimated EMI amount –
- The amount of loan an individual wishes to borrow
- Preferred loan repayment tenor
- Home loan interest rate imposed by the lender
After providing the necessary inputs, the calculator will display the following results –
- EMI amount payable
- Amortisation schedule
- Total amount of interest payable
- Total loan liability
- Financial management
By estimating the home loan EMI amount beforehand, a borrower can plan and manage his/her finances efficiently. Some home loan EMI calculators also provide an amortisation schedule. This schedule comes with a break-up of the principal and the interest amount of an EMI.
With this schedule, one can undertake major financial decisions that will ultimately impact his/her financial planning.
- Quick comparisons
The housing loan interest rates vary from lender to lender. An online home loan calculator will enable you to compare various financial institutions on the basis of the interest rate and the EMI payable. A meagre difference of 0.03% in the interest rates can bring a huge difference in the EMI amount payable.
With a home loan EMI calculator, one can check and compare across different lenders and choose the one that best suits his/her requirements.
In addition to this, a home loan calculator is entirely free to use. Moreover, individuals can access it anywhere, anytime. One can also change and adjust the entered values as many times as required to find suitable financial solutions.
Tips To Reduce Home Loan EMI
Borrowers can opt to reduce their home loan EMI amount to manage their financial needs more conveniently. Here are some effective tactics that individuals can employ –
- Part-prepayment: By making part-prepayments, a borrower basically pays off a portion of the principal amount beforehand. This helps to reduce the outstanding amount resulting in lower EMIs.
- Refinancing: Refinancing housing loans can be another effective strategy to lower the EMIs payable. Through refinancing, you can replace your existing lender with another offering comparatively lower interest rates. However, before switching, make sure that the interest savings is more than the balance transfer costs.
Leading housing financing companies provide these free online financial tools to help individuals customise their home loans.
They also extend pre-approved offers that help borrowers enjoy a smooth and hassle-free loan application process. These offers are available on a wide range of financial products, including home loans, loans against property, etc. To check your pre-approved offer, provide your name and basic contact details.
To sum up, individuals should take a look at the free online financial tools before applying for a home loan to ensure better management of funds.