Being a secured financing product, a home loan is a feasible credit option for individuals seeking to own a house. However, before proceeding with this option, it is crucial for prospective borrowers to estimate their monthly outgoes towards loan repayments. This has become increasingly crucial in recent times given the 50 basis point increase in repo rate by the RBI.
As the interest rates increase, borrowers can plan their repayments through a home loan EMI calculator. Mentioned below are a few reasons to use this online tool.
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Helps in easy calculations
Calculating EMIs manually is a complicated process that might take hours to compile. However, an EMI calculator helps individuals calculate home loan EMI in seconds by entering a few basic details. This online tool is easy to use and does not require complex steps. One simply need to enter the loan amount, tenor and rate of interest.
In addition, this calculator is available on the websites of different financial institutions, and is free to use. Thus, prospective borrowers can estimate their EMIs anytime and anywhere.
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Helps decide the loan amount
Calculating EMIs prior to obtaining a home loan can also help borrowers decide a suitable loan amount. Since a house loan EMI calculator estimates the EMIs based on the loan tenor, amount and rate of interest, borrowers can alter these fields to arrive at a sum that best suits their repayment capabilities.
For example, individuals can alter the interest rate and loan tenor in relation to the loan amount until they arrive at the most affordable EMI. Following this, one can apply for a home loan in an informed way.
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Helps plan repayment
Using a home loan EMI calculator is one of the easy ways to know how to pay home loan faster. Once individuals know their monthly outgoes towards loan repayments, they can plan their finances accordingly.
Housing loan for both Government and confidential workers are presented by the Lodging Money Organizations which range from purchasing/building a house either from the designer – fabricated, un-fabricated or under development or from a subsequent proprietor or for the improvement and remodel of the current structure.
In this regard, prospective borrowers need to gauge their fixed expenses and determine their most important financial commitments. Additionally, one needs to assess the areas where expenses can be cut down to meet the home loan EMI requirements. In simple terms, proper financial planning is the key for timely loan repayments.
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Helps plan prepayment
Most financial institutions offer the facility of loan prepayment to housing loan borrowers. This facility is extremely helpful when it comes to debt reduction. In simple terms, by paying off a massive chunk of debt before the end of the loan tenor substantially reduces the EMI burden and interest outgo of borrowers.
However, having a clear idea of the important factors to keep in mind when prepaying your home loan is a crucial factor before proceeding with this step. For instance, the repayment structure of loans is structured in a way that the interest amount surpasses the principal sum in the EMIs during the initial terms. At a later stage of the loan tenor, one’s principal amount is higher than the interest outgo. Thus, choosing to prepay the home loan during the initial years is ideal to save substantially on the interest amount.
A housing loan is an amount of cash a bank or monetary establishment loans to assist the individual with purchasing or constructing their fantasy home. By taking lodging credit from a bank or a lodging finance organization, the individual who applies for credit needs to vow the home as the moneylender’s security for reimbursement of the individual’s credit.
In this regard, knowing a housing loan EMI calculator can come to the rescue. The EMI estimation provided by this online tool also includes the loan amortization schedule. This table includes details pertaining to the interest and principal amount in the EMIs, helping borrowers choose the correct time to opt for loan prepayment.
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Helps compare lenders
One of the most crucial steps before obtaining a housing loan is to compare home loan offers of different banks and financial institutions. Since home loan interest rate varies from one lender to another, conducting a thorough comparison would help prospective borrowers choose a lender offering the most affordable terms.
In this regard, individuals can utilize a home loan EMI calculator to estimate the cost of borrowing across different lenders. Comparing different lenders available in the market could also help borrowers gather details on customized offers. For instance, some leading financial institutions offer specialized pre-approved offers for existing customers who meet the eligibility parameters. These offers, which are available on home loans and loans against property, help streamline, simplify and fasten the loan application procedure. Furthermore, individuals can check their pre-approved offers by entering their names and contact details.
Conclusion
With so many confidential area banks, and private as well as open area lodging supporting organizations loaning their shoulders out, it’s turning out to be steadily awkward for the shoppers to pick the best arrangement too. In this socio-legitimate examination, the public authority and confidential representative’s openness to get lodging credit is dissected.
Improper financial planning can delay loan repayment, leading to defaults. Defaulting on a home loan EMI can have severe outcomes, such as a drop in credit score, issuance of legal notice, and more. Knowing how to calculate home loan EMI can help borrowers steer clear of such situations.
Computing EMIs through a home loan EMI calculator is an easy and convenient process. However, before proceeding, one should check the eligibility parameter and work towards fulfilling them.
