Are you looking to avail of a home loan; however, you are confused regarding the EMIs? Well, that is one of the common questions that many have when looking to avail of a home loan. You, however, do not require fretting about it. This is because you can compute it easily using a home loan EMI calculator instantly! With this calculator, you can be well informed regarding the home loan way before you approach the bank for a loan. You can use the Axis Bank home loan EMI calculator, SBI Home Loan EMI Calculator or calculators of other banks to know an accurate outcome concerning your EMI.
Home loan EMI calculators endow you with a thoroughly clear outlook regarding your monthly EMIs when you place the details of your repayment tenure, loan amount, rate of interest and processing charges. The tool is extremely fast, simple, and a reliable source of info to compute your home loan EMIs. Note that the best part about the calculator is it is free!
So, Let Us Begin Exploring the Distinct Components of The Home Loan EMI Calculator:
When you apply for a home loan, the loan amount is the initial option that you require to select. Once you have decided on the property and are completely aware of its price, you must compute your down payment amount. Once done, you will get a better idea of what home loan amount you must apply for. Ensure to do the computations correctly to get the right value concerning your EMIs.
Repayment Tenure Of Home Loan
After you have decided on your loan proceeds, select the repayment tenure you would like to avail – beginning from six months to thirty years. The longer repayment tenure of a loan means a higher overall amount you would require repaying. However, you always can modify your repayment tenure on the EMI calculator to arrive at the repayment tenure that you are satisfied with.
Rate Of Interest & Processing Charge
Once you have placed the repayment tenure and loan amount on the home loan EMI calculator, the next thing you must do is enter the Best Home Loan Rate of Interest offered by the bank of your preference. You can simply check the different home loan rates offered by distinct banks online and place this in the EMI calculator.
Usually, banks have a 2 percent processing charge on home loans, which requires to be accounted for when computing your EMI.
Few individuals prefer to prepay a specific loan amount. The home loan calculator endows you with the option to specify whether you want to prepay your loan or not. Your month-on-month home loan EMI proceeds are computed depending on your choice.
Home loan calculators also have the choice to display amortization details regarding your home loan. These details assist you in understanding your interest paid, principal home loan proceeds, and outstanding loan proceeds on an annual or half-yearly basis.
So, a home loan calculator assists you to get a clear outlook of not just your monthly instalments but even enables you to know about other crucial details. So, get going; what are you waiting for?
Know The Home Loan EMI Computation Formula
Home loan EMI computation formula: EMI = [P X R X (1 + R) ^ N] / [(1 + R) ^ N – 1]
Wherein E = equated monthly instalment, r = interest rate per month, P = loan amount or principal and n = number of loan tenure or monthly instalments in months.
This formula does not include processing charges charged by the bank.
Home Loan EMI Computation with Example
Mr Parekh borrowed a home loan amount of 35 lakh (principal amount (p)) from an acclaimed bank. The interest rate (r) linked with the loan at 8.65 percent p.a. Loan repayment tenure (n) is 360 months for thirty years.
Once you apply the EMI formula to compute your EMI, the monthly instalment amount goes up to Rs 27,285.
P = Rs 35 lakh
R = 8.65 percent p.a.
N = 360 months or 30 years.
Rate of interest applied = 8.65 percent
Monthly EMI = Rs 27,285
Total EMI paid = Rs 27, 285 X 12 = Rs 3.27 lakh
How Can You Compute the Home Loan EMI Through the Excel Sheet?
Home loan EMI computation is an extremely simple method using the excel spreadsheet. To do so, 3 variables of the home loan are used, namely, repayment tenure, interest rate and loan amount. It should be noted that the interest rate must be computed on a monthly basis.
For instance, if the interest rate equates to 12 percent, it must be computed as 12 percent / 12 = 1 percent. The period shows the overall number of payable EMI. To compute the EMI, click on the ‘=’ symbol and type ‘PMT’ (interest rate, period, and loan amount), and next click enter. The Excel sheet will show an amount in the negative value. It shows the cash flow you must incur. It is the EMI that you must pay. For instance, if your loan proceeds equals Rs 5 lakh for a repayment tenure of 2 years at a 12 percent p.a., the formula to compute the EMI is
= PMT (12%/12, 24, 500000)
Know the benefits of using a home loan EMI calculator
There are various benefits of using a home loan calculator. These include:
∙ Simple Process: You just require entering the interest rate, loan proceeds, processing charges and repayment tenure. No complicated computations or application of difficult mathematics is required here. An actual calculation will be done by the home loan calculator.
∙ Get finance charges break up: This instrument assists you to understand your financial charges like overall interest payable and processing charges fee value linked with EMI. As financial institutions and banks show them as a percentage of the loan amount, having knowledge about the actual value can assist in understanding the right loan cost.
∙ Compare loan offers: You can use the home loan calculator to easily compare the loan offers from different banks. The result will show you the overall loan cost alongside their respective loan EMIs. This will assist you in narrowing down the most feasible option.