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What is a Home Loan EMI Calculator?

The decision of buying a property involves two significant aspects; buying a property and acquiring a loan. Both these decisions need an adequate amount of planning. In order to make wise and informed decisions, planning is imperative.  A home loan is a loan which is acquired from a financial institution such as banks to buy a home. In the current scenario, Home loans are the most sought-after loans. Making a property purchase requires you to acquire a home loan of a hefty amount of money that needs to be paid off over a longer period. A home loan is always subject to a certain percentage of interest.  Before availing a home loan, you need to assess your financial capability of repaying the loan in order to avoid an unnecessary financial crisis. Hence you need an efficient Home Loan EMI Calculator. A calculator that helps you compute EMI of a home loan is a Home Loan EMI calculator.  It is free of cost and an easy to use tool. The EMI Home Loan Calculator requires a few details such as loan tenure, loan amount and interest rate to give you an accurate result within seconds. The calculated amount is the exact EMI (Equal Monthly Installment) that you will need to pay the bank monthly.

What Is An EMI?

EMI is the abbreviation for Equal Monthly Installment. It is a calculated sum of money that you need to pay each month to the financial institution you have availed a loan from till the full loan amount and the interest levied on it is completely paid off. This amount consists of both a part of the principal and the interest that needs to be repaid. Usually, the interest component of the EMI would be larger in the first few initial months and eventually decrease with every payment. The percentage of principal included in each payment is subject to interest rate levied on the home loan. Your EMI will not change. However, the percentage of interest and principal included in your EMI will change. After every EMI payment, you will be paying more of the principal than of the interest.

What Is The Formula For Calculating EMI?

There is an easy mathematical formula to calculate EMI Amount.

EMI Amount= [P x R x (1+R) ^N]/ [(1+R) ^N-1]

Here,

P- It stands for the principal amount. This is the original loan amount that the bank has given you. On the basis of this amount, the interest will be calculated.

R- It stands for rate of interest that is set by the bank and levied on the principal amount.

N- This stands for the period for which loan has been taken. Since EMI is calculated on a monthly basis, the duration of the loan is calculated in number of months.

In this equation P, N and R are variables. This means every time the value of any or all of these three variable changes the EMI amount will change.

For example: You take a loan of INR 1,00,00,000 with a rate of interest of 12% for a period of10 years(120 months) then your EMI amount= [1,00,00,000x12/100x(1+12)^120]/ [(1+12/100)^120-1]= INR 1,43,471.

Computing the EMI amount with the above formula manually is time-consuming, prone to errors, and complex. Our Home Loan EMI Calculator will automate this calculation for your convenience, and in split seconds you will get your desired results along with the breakup of the total payment and the payment schedule.

How to use the Home Loan EMI Calculator?

On Fingyan.com it is very easy to use a Home Loan EMI Calculator. When you are on Fingyan’s homepage, click on the loan category on the main menu and select home loan. This will lead you to the home loan page. On this page, you will see a Home Loan EMI Calculator. You are required to fill out three simple details. 1st you have to enter the loan amount that you have in mind. Second, you have to fill the interest rate levied on the home loan you wish to apply for. Thirdly you need to fill the tenure of the home loan. You must fill in the tenure is a form of months. Say if the tenure is 1 year then you will have to fill in 12 months, if it is 2 years you will have to fill in 24 months and so on. After you fill all the three details, you need to click on the calculate button. Once you click the button three new values will appear namely total interest payable, total amount payable and your EMI. This process will take only a split second.

What are the factors that affect Home Loan EMI?

There are numerous factors that impact the Home Loan EMI calculation. The obvious factors include the Principal amount of the loan, the rate of interest levied by the bank and the tenure for which the loan has been taken. Any change in any of these variables changes the EMI amount; these variables have a direct impact on the EMI calculation. Other significant factors that impact the Home loan EMI are as follows

  • Income
  • Qualifications
  • Age
  • Type of Occupation
  • Assets, Liabilities
  • Continuity of occupation
  • Number of dependents
  • Stability
  • Savings History
  • Co-Applicant’s Income
  • Value of the property selected

What Are The Benefits Of Utilizing A Home Loan EMI Calculator?

There are numerous benefits of using a Home Loan EMI Calculator. Here is a list:

  • It is a time-saving tool: The EMI formula is a complex formula, it can be cumbersome and time-consuming to calculate Home Loan EMI amount manually. A Home Loan EMI calculator not only saves your time, but it also gives you the accurate results in seconds. It's not a time saver; it is a super time saver because it displays the Home Loan EMI amount instantly. You only need to fill in three details on the Home Loan EMI Calculator.
  • A Home Loan EMI Calculator helps with financial planning: A Home Loan EMI Calculator is not just a tool that helps you determine the value of your EMI, but also helps you determine your repayment capacity, and avoid an unnecessary financial crisis in the future. By the application of a number of permutations and combinations on a Home Loan EMI Calculator, you can determine the amount of EMI you can conveniently pay each month and opt for that right home loan option. This calculator helps you avoid selecting an amount that will strain your finances and lead to a poor credit score and home loan repayment default.
  • A Home Loan EMI Calculator is accurate: Manual EMI calculations can yield wrong results at times. Wrong manual calculations can lead to making the wrong decision and making a mistake while selecting a home loan. You should not always bank on manual calculations. Hence using a Home Loan EMI Calculator is the wise thing to do to determine accurate results.
  • Different housing deals to choose from: The Home Loan calculator not only accurately determines the EMI value, but it also lays out a consolidated list of home loan deals that may fit your eligibility and requirement. This displayed consolidated list is a result of in-depth research of the available home loans in the market. It also includes all details of each loan such as interest rate, the tenure of the loan, and loan amount to help you pick the right home loan deal on the basis of your eligibility and affordance.

What Are The Plus Points Of Taking A Home Loan?

Availing a home loan is a convenient way of purchasing a property without the burden of facing a financial crisis. There are multiple reasons that go in favor of taking a home loan. Some of them are listed below:

  • Convenient Funding: Purchasing property is one of the costliest investments that you will make in your lifetime. For most of us, it is next to impossible to purchase a house solely out of our savings. With a home loan, you can conveniently realize your dream of owning your own house and repay easily through monthly instalments for a long period of time. You can make use of the Home Loan EMI Calculator to accurately calculate your Home Loan EMI amount.
  • Great Credit Score: A credit score measures an individual’s creditworthiness. Lenders assess your financial capability to repay a loan on the basis of your credit score and make the decision of whether your loan should be sanctioned or not. A home loan can be repaid up to a long period of 20 years. Some home loans can also be repaid over a period of 30 years. The right home loan, continuous and stable repayment of the same will only build your credit score.
  • Capital Gain: Property prices always go up in the charts over the years. A good appreciation is expected in the coming years. People usually invest in property because of the expected and obvious capital appreciation. With time not only the property prices have increased, the cost of construction and rental income has also substantially increased. These factors also make a property purchase an attractive option in comparison to other investment options. This investment option can guard you against inflation in the long run. Hence whether you want to sell off your property in the long run or hold it, you are bound to increase your net worth.
  • Tax Benefit: Availing a Home Loan can bring you tax benefits on the principal and the interest paid. As per the Income-tax Act 1961, section 24(b) you are entitled to claim a tax deduction up to an amount of INR 2,00,000 on the interest payable on the home loan. If you have paid interest during the pre-construction or pre-acquisition stage, then you can claim a tax deduction in five equal annual instalments from the year the house is constructed or acquired.

As specified in section 80C of the Income Tax Act 1961, you can avail principal payment up to INR 1, 50,000 on your home loan as a deduction from gross total income.

As per the financial budget of 2018, first time home buyers can additionally deduct INR 50,000 under section 80EE. This amount can only be availed if the following conditions are met.

  1. The purchased property’s value should be less than INR 50 Lakhs and the Home loan availed should be less than INR 35 Lakhs.
  2. This is applicable only between 1st April 2018 and 31st March 2019.
  3. The deduction benefit can be availed during the entire period of repayment.

Points To Think Through Before Taking A Home Loan In India

Some of the significant points that you need to consider before applying for a home are as follows:

  • Eligibility: You must assess your home loan eligibility before taking a home loan. You must carefully understand eligibility criteria for each of the home loan deals and assess whether you are eligible or you are not eligible for the home loan before you apply for one.
  • EMI Amount: Before taking a home loan or even applying for it you must assess your affordability and financial capacity. Use a Home Loan EMI Calculator to accurately derive the EMI amount and then make a decision keeping in mind your income and capacity to repay. You must assess whether you are comfortable paying the calculated EMI amount without straining your finances.
  • Inspect about additional charges: It is important to go for a home loan that offers lowest interest rates. It is also essential to know whether or not there are any additional charges associated with the home loan. Some such charges include loan conversion charge, legal verification charge, processing fees and MODT charges.
  • In-Depth Research: With the market overflowing with lenders and Home loan schemes, it is crucial to compare different home loan deals before you pick the most appropriate home loan product. You must carefully read through all terms and conditions of the loan agreement to make wise and informed decisions.

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