If you are thinking about purchasing a property, then there are various things that you need to take into consideration. And EMI is one essential thing that you need to pay for the upcoming years. The equated monthly instalments are nothing but the payments you make towards your home loan every month.
So before you can acquire a home loan, it is essential to do your research. And with a home loan calculator at your disposal, you can easily calculate your possible EMI amount. This handy tool allows you to calculate the number of monthly instalments that you need to pay for your home loan. And through this, you can determine and ensure that there is not much strain on your overall finances.
This article will reveal the techniques of calculating the housing loan EMI on a home loan calculator. Also, you will get to know how the EMI calculator is beneficial. Let’s begin.
Calculate Your Home Loan EMI on Home Loan Calculator
Any credible financial institution will calculate your home loan EMI based on various factors. However, it is done only after determining or assuming that you are eligible for a home loan. The monthly EMI is typically calculated by making the best of this formula mentioned below:
- The total payable amount (interest amount + principal amount) over the entire tenure of a home loan is divided by the number of months of the loan tenure.
This will give you a rough idea about your monthly EMI amount.
You should remember that your home loan EMI amount might be affected due to tenure and interest rate changes. So it is incredibly crucial to stay updated with the trending plans and ongoing interest rates. And using a home loan calculator will help you get an estimate of your monthly instalments under distinctive scenarios.
Thus, you can readily choose the loan tenure and offer that suits you best.
The formula for calculating your home loan EMI is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Here, the initials stand for:
- EMI: Equated Monthly Instalment
- P: Principal amount or loan amount
- R: Rate of interest per month (the yearly interest is divided by 12 in order to acquire a monthly interest rate)
- N: Loan tenure in months
Advantages of Using a Home Loan EMI Calculator
Some of the most compelling benefits of using a home loan EMI calculator are:
- It enables you to see a detailed breakdown of the EMI amount you need to repay towards the principal amount.
- It helps you plan your finances better, so you know how much you need to save each month from repaying your home loan. Thus, it helps you stay ahead of your expenses while making informed decisions.
- It is usually very easy to use in comparison to manual calculating techniques.
- With a home loan EMI calculator, you can easily compare various loan offers from multiple financial institutions.
- It is free, and you can seamlessly use it to calculate your repayment schedule and home loan EMI amount.
- Lastly, a home loan EMI calculator helps you choose the perfect tenure for your home loan.
One of the biggest concerns associated with home loans is the monthly EMI payments. And this is where a home loan calculator comes to the rescue in calculating the EMI amount. So, you can plan your finances better with a detailed breakdown of your monthly EMI payments.