What Is A Housing Loan EMI Calculator?

While it may look simple at the base formula level, home loan EMI calculations are in fact quite complicated. This is because borrowers will need to calculate their EMI again and again based on the loan variables that change with each factor and financial partner. Keeping this in mind, many leading housing finance companies offer online tools called home loan EMI calculators that help you to calculate and get a conservative estimate.

This online tool is a good way to familiarize you with the monthly payment requirements that go with a loan. It also comes as a welcome aid for people, who do not have any background in finance or commerce, primarily because it is user-friendly. Plugging in the gaps where the lack of finance education can hinder you, an ideal home loan EMI calculator in India can help you to research about several home loan possibilities to identify the most useful solution in terms of the tenure and EMIs. This tool is definitely recommended for all first time borrowers, who are looking at housing options in terms of locality, price and the EMIs that they can comfortably afford.

Different financial organizations offer their brand of home loan EMI calculators to choose from. While the basic agenda is to help borrowers to understand the potential EMIs, individual financial entities offer different insights into the loan. Some tools will allow you to consider the ratio of the principal amount to the interest. Others will help to demonstrate amortization schedule calculation i.e. a snapshot view of the whole period of the loan, showing the interest and principal amount paid over time. Whether you want to know the total interest paid or just the way in which your tenure, interest and amount affects the EMIs, the housing loan EMI calculator is the best tool to see that.

A perfect home loan calculator will also help you to gather insights that might help with your decision making. One of them could be the understanding that extending the tenure or loan term is a double-edged sword. While doing this will reduce your EMIs, you will end up paying much more interest than the principal amount. This tool will also help you to work out how a slight change in the interest rate can affect your total amount payable and EMIs. All these factors highlight just how important it is to thoroughly research all the possible home loans in India to settle on the lowest interest rate possible.

You should always be careful before making such a financial commitment, though. It is also not possible for most people to take into account the future expenses. It is advisable to ensure that the EMIs remain less than 30 percent of your monthly income. It is also important to understand that you can’t base your decisions just on a housing loan EMI calculator. That is because the numbers provided are just indicators and rough estimates. In addition to your own calculations, it is always wise to consult a financial expert to make the right choice while buying your dream home.