There is no dearth of lenders in the market today. All lenders try their best to lure new customers with attractive offers, such as the lowest Home Loan interest rates, long repayment tenor, nil or inexpensive prepayment or foreclosure fee, etc. However, to be able to benefit from such offers, one must first qualify a lender’s eligibility criteria. Therefore, all borrowers must use a Home Loan eligibility calculator before applying for a Home Loan to gauge their eligibility for a loan as well as work out an affordable EMI amount. This is the smartest thing you can do before beginning your Home Loan application process.
When availing a Housing Loan[1] , borrowers must keep in mind that while we all want to afford the most beautiful home we have ever laid our eyes on, one must decide to go for a house that aligns well with one’s financial standing as well as future repayment capacity. In other words, to fulfil one’s desire of owning a coveted home, one should not risk one’s financial stability. A Home Loan EMI calculator is a very handy tool in this regard as it tells aspiring borrowers exactly what they can afford and what's out of their reach. Let us look into how this useful and easy-to-use tool can help aspiring homebuyers make the right decision.
EMIs are calculated using this formula,
EMI = [P x R x (1+R) ^n] / [(1+R) ^ n-1]
Here,
P is the principal amount that a borrower wishes to borrow, R is the rate of interest they are being offered and n is the loan tenor in months.
A normal Home Loan borrower can use three different methods to calculate their Home Loan EMIs: manual calculations, using an excel sheet or using a Home Loan EMI calculator.
The EMI calculation formula is a complicated formula that includes three different variables. Thus, manually calculating EMIs is no easy task. It does not matter how smart you are or how good your Maths is, you can never guarantee error-free calculations. Further, the formula also creates ample scope for errors. On the other hand, while excel sheets invariably deliver accurate results, not everyone is familiar with Excel.
On the other hand, a Home Loan EMI calculator is an easy-to-use tool that can be trusted for accuracy. You can use the calculator as many times as you like and it will deliver accurate results in just a few seconds every single time.
Before they apply for a housing loan, all borrowers must use a Home Loan EMI calculator[2] to figure out their EMI obligation concerning the amount they wish to borrow. The Home Loan EMI calculator is a simple tool that has been designed in such a way that almost anyone can use it.
The calculator requires one to enter three different values: the rate of interest being offered, their desired principal loan amount and the desired loan tenor. Once a person enters these values and clicks on ‘calculate’, the calculator delivers results in an instant. The result gives you your tentative EMI, the principal and interest components of the Home Loan as well as your tentative repayment schedule for the loan tenor chosen by you.
The Home Loan EMI calculator does not require you to enter any complicated information. It is easy to use – all you need is a laptop or a smartphone, an internet connection and basic knowledge of how the internet works to be able to use this smart tool.
Using a Home Loan EMI calculator, borrowers must calculate the Home Loan EMI they will need to pay each month even before applying for a Home Loan. This is crucial as knowing one’s tentative EMIs allows one to shift and re-shift their monthly budget allocations to create scope for the new liability.
Borrowers must try their best to avoid the possibility of late payments and missed EMIs as these two conditions negatively impact a borrower’s CIBIL score and their ability to avail of a loan in the future. Calculate Home Loan EMIs using this handy tool and apply for a loan amount that you can easily afford and an EMI that will not disturb your monthly budget more than it should. This will help you repay the loan and become debt-free in an easy and stress-free manner.
If you are a borrower with high creditworthiness, different lenders will try to onboard you as a customer by extending lucrative offers. They will entice you with the lowest Home Loan interest rates, by offering you a rebate on fees and additional charges, beneficial loan terms and conditions, etc. When this happens, you must be extra careful about choosing the right deal for you. A Home Loan EMI calculator will prove helpful.
Home Loan EMI calculators are quick and accurate. Thus, aspiring borrowers can use this tool to compare offers from different lenders and work out which loan offer will be most beneficial for them. In other words, a Home Loan EMI calculator can help borrowers figure out the best loan deal for them.
A Home Loan is a long-term commitment. The tenor for these loans extends up to 30 years, with most people choosing to repay the loan between 15 to 20 years. Such a long-term commitment requires careful planning and proper decision-making.
Borrowers must use a Home Loan eligibility calculator to figure out the loan amount they are eligible for. Applying for this amount will ensure easy approval and beneficial loan terms and conditions. Borrowers must also use a Home Loan EMI calculator to work out the Home Loan EMIs they can afford as well as the EMI they will be obligated to pay each month if they take their desired loan amount. This step is essential to judge the affordability of the loan in the long term.
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