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In response to RBI’s reduction in repo rate, several financial institutions have slashed their interest rates on home loans. Such a move will prove quite beneficial for those individuals who plan on purchasing a house on credit.
Regardless of the reduction in interest rates, individuals must factor in their capacity to repay before applying for housing credit.
To do the same effectively, they can use financial tools like home loan EMI calculator and gauge their repayment capability, among other factors. Furthermore, such a tool also proves useful in enhancing the experience of availing and managing a loan more efficiently.
Benefits of a housing loan EMI calculator
The said financial tool extends these benefits to its users –
Ease of use
An EMI calculator can be used for free and is easy to use. All one needs to do is enter the loan value they intend to borrow, a suitable tenor and applicable home loan interest rates. One can easily find an EMI calculator online and use the same effortlessly.
Accurate calculations
EMI calculation is based on a complex formula of amortisation and requires individuals to have a proper understanding of the same to carry out manual computations.
Online EMI calculators are already equipped with the required information and do not require individuals to calculate the same manually. It helps users to achieve a more accurate outcome once the parameters are entered correctly. Furthermore, it proves useful in eliminating the occurrence of careless mistakes.
Fast outcome
The entire process to calculate loan monthly instalments with an EMI calculator is less cumbersome and time-saving.
Easy to adjust
Since a home loan EMI calculator is free to use, individuals can make multiple adjustments to the loan value and tenor to arrive at a suitable combination. This particular feature helps to avail a loan amount that matches the borrower’s repayment capacity.
Better comparison
The fact one can make multiple adjustments to the calculations further helps users to compare different home loan options effectively. For instance, users can compare to see which lender provides a high-value loan at a reasonable rate of interest and a convenient repayment tenor.
Financial management
Effective financial management is one of the potent benefits of calculating EMIs before taking a home loan. Users not just gain a better idea about the overall financial obligation associated with the credit option but are also able to gauge their repayment capability. This further offers them valuable insight into how to tweak their finances effectively.
Steps to use an EMI calculator
A house loan calculator uses the below-mentioned formula –
E = [P x R x (1+R) ^ N] / [(1+R) ^ N-1]
Where,
- E = EMI amount.
- P = Principal amount.
- R = Rate of interest.
- N = Loan tenor months.
Individuals can use the financial tool by simply following these few steps –
Step 1 – Visit an HFC’s official website.
Step 2 – Look for ‘home loan EMI calculator online’.
Step 3 – Enter details pertaining to the loan like loan amount, rate of interest and tenor.
Step 4 – Check the figures that will appear on the screen.
Based on the outcome, individuals can make an informed decision about their choice of lender and the loan value. Nonetheless, before proceeding with the application, individuals must make it a point to check the eligibility criteria set against the credit option. You can now also do Bajaj Finance online payment using your mobile phone anywhere.
Hence, by using an online home loan EMI calculator, users can avail accurate loan amount calculation within a few seconds. Also, the tool will prove useful for comparing leading loan options and will further help to manage finances for timely payment.
