The Home loan EMI calculator uses the inputs of the loan amount, interest rate, and loan tenure to determine the equal monthly instalment (EMI) that a borrower needs to pay to repay the loan.
The formula used is: EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P is the loan amount, R is the monthly interest rate (calculated as the annual interest rate divided by 12), and N is the number of months for the loan tenure.
The housing loan EMI calculator calculates the EMI for the given inputs and displays the amount to be paid every month until the loan is fully paid off.
Listed below are the advantages of a Home Loan EMI Calculator
It is easy to use
Home loan EMI calculators are user-friendly and typically require the input of the loan amount, interest rate, and loan tenure to calculate the monthly EMI amount. Anyone can use this online accounting tool with ease.
It provides accurate calculations
Home loan EMI calculators are designed to provide accurate calculations based on the inputs provided. However, the accuracy may vary depending on the information entered and the methodology used by the calculator. It is always recommended to verify the results with your lender.
Shows EMI amount and repayment schedule
The home loan EMI calculator is a tool that considers the loan amount, interest rate, and loan tenure to calculate the EMI. It also generates a repayment schedule that shows the payment breakdown in terms of principal and interest components for each month of the loan tenure.
Factors in the interest rate and loan tenure
EMI calculator typically considers two main factors: interest rate and loan tenure, to calculate the Equated Monthly Instalments (EMIs) that a borrower will have to pay towards repayment of their home loan. The EMI amount is calculated based on the principal loan amount, interest rate, and loan tenure.
Helps plan budget.
It is a useful tool to estimate your monthly repayments on a home loan and help you plan your budget effectively. By inputting the loan amount, interest rate, and loan term, the calculator can calculate your EMI and give you an idea of how much you need to set aside each month to repay your home loan. This helps you make informed decisions and avoid any financial surprises in the future.
Assists in choosing the right loan amount.
The home loan EMI calculator helps you determine the right loan amount you can easily pay monthly. It considers the loan amount, interest rate, and tenure to calculate the EMI. This helps the borrowers, when they apply for a home loan, to plan their finances better and choose a loan amount they are comfortable with based on their monthly income and other expenses.
Compares different loan options.
An EMI calculator for home loans helps borrowers compare different loan options based on their loan amount, interest rate, and loan tenure. By entering these details, the calculator provides an estimate of the monthly payment required to repay the loan and the total interest payable over the loan term. This helps borrowers decide which loan option best suits their financial situation and repayment capacity.
Shows the impact of prepayments.
A home loan calculator can show prepayments’ impact on the total interest paid and loan tenure. The calculator can generate a payment plan by inputting the loan amount, interest rate, and loan tenure. When you make a prepayment, the outstanding loan amount reduces, leading to a reduction in the total interest paid and sometimes a reduction in the loan tenure. An EMI calculator can help you compare various scenarios with and without prepayments to determine your best course of action.
Now that you know the advantages of the Home Loan EMI Calculator, use it to calculate the EMIs or comparisons before you apply for a home loan.