A home loan is one of the most popular ways for young homeowners to own homes. With the soaring costs of houses across the country, a home loan is the best way for people to buy their dream homes. With lenders going digital, it is now possible for borrowers to research lenders and their loan offerings online, make loan applications online and even get loans approved online.
In earlier times, borrowers had to rely on loan amortization schedules from the lender to find out the EMI amount. However, with everything going digital, it is now possible to find out the instalment amount using a home loan EMI calculator.
What is a home loan EMI calculator?
A housing loan, like other loans, is repaid in the form of monthly instalments. These instalments are the same amount from the time the repayment starts until the loan is repaid. The monthly instalment is a sum of both the principal repayment and the interest payment. The split between the principal repayment and the interest payment is different as the loan repayment progresses. In the initial few years of repayment, the interest component of the instalment is higher. Whereas towards the later part of the loan repayment, the principal repayment is higher.
It is possible to find this out using a home loan EMI calculator. This calculator finds out the monthly instalment amount using a formula. The formula is not shown to the user. This calculator is available for free on the lender’s website. It does not matter which lender’s website you visit or whether you are an existing customer of the lender. The calculator can be used for free.
How to use a home loan EMI calculator?
It is effortless to use a home loan EMI calculator. To find out the monthly instalment amount, you need to input three things into the calculator:
- Principal amount
- Loan tenure
- Rate of Interest
Once you enter the three details, you need to press submit. Once you submit this information, the calculator will automatically display the monthly instalment amount. This information that you add in the calculator can be changed to determine the impact on the EMI. For example, if you want to check the effect of the loan tenure on your EMI, you can change it in the calculator and determine the two different EMI options. This can help you select the right term for your home loan.
Some lenders may have the interest rate of the lender stated in the EMI calculator for home loan. In such a case, the interest rate will not be open to being edited. However, in other cases, the user can manually enter the details.
