Home loan planning does not just end at finding the right home loan lender who can meet all your financing needs adequately – it also means that you do all that you can to improve your chances of getting a home loan deal that is competitive and compliments your financial standing and needs. It entails ensuring that your CIBIL score matches the lender’s requirements, improving your repayment records, and most importantly, applying for a home loan amount that is feasible and fits your repayment capacity.
The home loan amount you request is the foremost thing the lender evaluates, as complete repayment of the loan amount is the lender’s primary concern. Keeping that in mind, lenders assess your financial stability, repayment capacity and your likelihood of sticking to the repayment plan, and if the amount you request seems larger than what you can afford – your loan application may be rejected.
Home loan rejections can slow down your plans to buy a new property and worse – affect your credit profile. To avoid such circumstances, you should tailor your home loan application to meet the lender’s comfort and lending criteria, including making a tentative EMI repayment plan ahead of time – anticipating your repayment power and budget. For this, you can use a home loan EMI calculator that tells you what your EMI amount can look like based on your desired home loan amount.
What are the Features of a Home Loan Calculator?
Home loan calculators are free to use and available online, so anybody interested can use them to plan their home loan repayment. These calculators are agile and quick, bringing data-driven results with almost no errors. Here are some features of a
home loan EMI calculator that you enjoy upon utility.
1. Accurate EMI Calculations
The primary benefit of a home loan EMI calculator is its accurate EMI calculations that help prospective borrowers assess their EMI obligations if they borrow their desired home loan amount. The results are computed based on details provided, including the desired home loan principal amount, current interest rate, and your preferred repayment tenor. What’s more is that you can continue calculating your EMI payable numerous times, with various combinations to give you the most favourable home loan scenario at zero additional costs.
2. Handy Repayment Guide
Borrowers are advised to use the calculator tool to calculate their home loan EMIs ahead of applying for a home loan to aid in their home loan repayment planning. By knowing your potential home loan EMI amount, you can take stock of your existing finances, and decide if the amount fits into your repayment budget, and tailor your home loan ask accordingly.
Most home loan EMI calculators also help you by forecasting a tentative EMI repayment chart and a
home loan amortization schedule – allowing you a deeper insight into your home loan obligation.
3. Comparative Analysis
In a market that offers consumers many options, one shouldn’t jump at the first home loan deal they get. Borrowers can also use the calculator tool to compare lenders by calculating the EMI payables for each – based on their lending terms and their current home loan offerings, such as the interest rate.
Such activities empower you to make the best choice for your financing needs and housing aspirations, considering your budget, capacity, and current obligations.
How to Use a Home Loan Calculator?
The most appealing attribute of a home loan calculator is its easy functionality. The tool is designed to be exceptionally explanatory and easy to use, and one can get their desired results in just seconds. While the finer details of each calculator tool may differ, the details you typically provide remain the same.
Here is the basic formula based on which the calculator calculates your EMI payable:
EMI = [P x R x (1+R) ^n] / [(1+R) ^ n-1], where
P = Principal loan amount
R = Rate of interest
N = Number of monthly instalments
While the formula is seemingly simple, manual calculations are more prone to errors, especially with bigger numbers and complex variables. To avoid such hassles, follow the steps mentioned below to use a home loan calculator:
1. Enter your desired home loan amount
2. Select the tenor you wish to opt for
3. Select the home loan interest rate that you want
Based on these inputs, the calculator tool will project the following:
1. Your tentative home loan EMI amount
2. The interest component of your repayment amount
3. The principal component of your repayment amount
4. Your tentative home loan repayment schedule
Equipped with these insights, you can now
apply for a home loan with better knowledge of what you stand to gain and select the lender of your choice, who can offer you the most competitive terms based on your needs and eligibility.
